Coronavirus India: More tax on rich people, help of Rs 5000 to poor, Income Tax officers’ recommendation

New Delhi, April 26, 2020: To revive the economy affected by the lockdown, 50 Indian Revenue Service (IRS) officials, in a report, recommended raising the income tax rate for people with an annual income of more than one crore rupees to 40 percent, re-impose wealth tax. These officials made these recommendations in their report titled ‘Fiscal Options & Response to Covid-19 Epidemic (FORCE)’.

They have also asked to impose COVID19 cess at the rate of four per cent on the people earning more than ten lakh rupees, transfer the amount of up to Rs 5,000 every month for six months to the poor people account Has recommended tax holiday for three years for all corporate and businesses, healthcare sector.

The lockdown has been in force in the country for 40 days due to the novel Coronavirus in India. Due to this, economic activities have come to a standstill and this has affected the government exchequer and there is a possibility of a huge reduction in tax collection in the coming time. In such circumstances, 50 IRS officers have suggested some new ideas to the government to bring the economy back on track.

Officials have said in their report that economic growth can be strengthened by implementing the idea given by them and at the same time income can be increased from tax. They have recommended proposals to be implemented in the short term (3-6 months) and medium-term (9-12 months) to deal with the epidemic and increase revenue.

Higher taxes on the rich
Officials in their report have recommended higher tax on the rich. They have recommended increasing the existing slab of tax from 30 per cent to 40 per cent for people with revenue of more than Rs 1 crore for a limited period or a fixed time. Apart from this, it has been recommended to re-levy property tax on those with assets of more than five crore rupees.

Recommend benefits directly to the poor
In their report, the officials have recommended providing direct assistance of Rs 3000 to Rs 5000 per month to the people from economically weaker sections for six months. It has been recommended to give this amount to farmers, daily wage labourers and extremely low-income people. If this recommendation is accepted, then it will benefit 12 Crore people.

Tax on income of foreign companies in India
Officials recommended increasing the surcharge applicable to income from Indian offices or permanent establishments to foreign companies. At present, foreign companies have to pay a surcharge at the rate of two percent on earning from one crore to ten crore rupees from Indian business. At the same time, the surcharge has to be paid at the rate of five percent on income of more than Rs 10 crore.

COVID Relief Cess
IRS officials in their report have recommended the imposition of four percent ‘COVID Relief Cess’ on people with an annual income of Rs 10 lakh. It is recommended to levy this tax once.

Use of CSR Fund as a COVID Relief item
Officials believe that tax incentives should be increased for Corporate Social Responsibility (CSR) activities in this hour of crisis. They said that the salary that corporate companies are giving to the non-managerial staff at the time of COVID19 should be considered as CSR activity. Also, the amount deposited by companies in Chief Minister Relief Fund should be considered as CSR. This option has been recommended to be given in this financial year as well as in the next financial year.