The finance ministry today said another round of restructuring of income tax slabs was likely after the direct taxes code came into effect from April 2011.
Finance minister Pranab Mukherjee had widened the slabs in his budget proposals for 2010-11. There will be no tax for income up to Rs 1.6 lakh. A 10 per cent tax will be levied on income up to Rs 5 lakh, 20 per cent on income up to Rs 8 lakh and 30 per cent on income beyond that.
The new tax code suggests a 10 per cent tax on income between Rs 1.6 lakh and Rs 10 lakh, 20 per cent on income up to Rs 25 lakh and 30 per cent on income beyond that.
A further widening (of tax slabs) is possible. But this will happen when the revised (draft direct taxes code) paper comes, revenue secretary Sunil Mitra told reporters today. The finance ministry will come out with the revised draft in the first quarter of the next fiscal so that a bill can be tabled in the monsoon session of Parliament.
Net direct tax collections during the first 11 months of the present fiscal stood at Rs 2,78,373 crore, up from Rs 2,58,902 crore in the same period last fiscal, a growth of 7.52 per cent.
Finance ministry officials, according to agencies, are confident that the direct tax target of Rs 3,87, 000 crore, revised from the budget estimate of Rs 3,70,000 crore, for the current fiscal would be met as tax payers are likely to give more than Rs 1,00,000 crore in the last month.
Mitra said the government did not expect PSU employees to protest against divestment in state-run companies, adding that the target of Rs 40,000 crore next fiscal was modest and achievable.
In the current fiscal, the government has divested stakes in Oil India, NHPC, and NTPC, while the Rural Electrification Corporation float has just closed.
NMDC is likely to hit the market next month; Satluj Jal Vidyut Nigam will float shares in the next fiscal.
The proposed goods and services tax (GST) rate is likely to be higher than 12 per cent, the revenue secretary said. The task force set up by the 13th Finance Commission had suggested a 12 per cent rate.
Mitra clarified that he was referring to the combined tax rate of the Centre and state governments. The task force had recommended a 5 per cent GST rate at the central level and 7 per cent at the state level.