Changing Mindsets

Last year, the government reduced the headline corporate tax rate from 30 per cent to 22 per cent, taking a ₹1.45 lakh-crore revenue hit. In this year’s Budget, it lowered income tax rates. Both were bold ‘reforms’, which simplified the tax structure. But reforms are not just limited to tax rates. They are also about stability in tax policies and change in mindset of officers towards taxpayers, say experts.

Stability of Tax Laws

A committee under former Central Board of Direct Taxes member Akhilesh, “We had suggested delinking the direct tax policy from the Budget. Tax policy should be considered in consultation with stakeholders and then a consolidated policy statement with a draft amendment Bill should be circulated.” According to Ranjan, making changes every year in the Budget creates uncertainty among businesses and taxpayers. All tax rates should come under the Income Tax Act itself so that there is stability as far as laws and tax rates are concerned.