The Finance Minister has hinted towards the possibility of reducing income tax rates. But dont rejoice, if the Exempt-Exempt-Tax-regime is introduced even your PPF and insurance payout could be taxable.
Since the last budget, the Government's coffers have registered huge growth in direct tax realisations.
The income tax collections have shot up by over 26 per cent since last year, while the corporate tax has risen by over 35 per cent.
Buoyed up by the rise in tax collections, the Finance Minister has already indicated about the possibility of reducing the income tax rates. In fact experts say that a reduction in tax rates revenues could lead to further compliance.
Either Tax rate should be reduced or reduction in number of taxes would be beneficial for corporates as it would reduce other processes, said PricewaterhouseCoopers Executive Director Gautam Mehra.
Any serious discussion over reducing the income and corporate tax levels will happen only in January next year, which incidentally is also the time around which the Government plans to come up with the new Income Tax Act.
The new Act is aimed at simplifying taxation rules and modifying exemption norms.