Direct Tax Reforms Panel: Easwar Committee Recommendations

Introduction

GOI has established the tax reforms panel to streamline the indirect and direct tax policy for transparent administration.

Direct Tax Recommending committee’s

Parthasarthy Shome committee recommended the establishment of two tax panels
Tax Policy Research Unit (TPRU) and
Tax Policy Council (TPC)
Easwar committee recommendations on Tax Deducted at Source (TDS)

Tax Policy Council

Headed by Finance Minister
Advisory in nature
Identify key tax policy decisions
Suggest broad taxation policy measures
Nine member body including

           1. NITI Aayog Vice Chairman
           2. Minister of state, Finance
           3. Finance Secretary
           4. Commerce Minister
           5. Chief Economic Advisor
           6. DEA Secretary
           7. DIPP Secretary
           8. Revenue department secretary

9. Secretary of commerce department

Tax Policy Research Unit

Multi disciplinary body
Analyze and examine any tax policy or fiscal referred by CBDT and CBEC
Disseminate and prepare background papers and policy documents pertaining to various taxation issues
Comprises officers from CBDT, CBEC, economists, researchers, statisticians and legal experts

Easwar Committee recommendations

Retired High court Judge Easwar committee was formed by GOI to change the direct tax laws
The committee recommends for simplification in TDS
Tax refunds to be made faster
Deduction from taxable income slab revision
Stock market gains up to 5 lac will be treated as capital gains
These stock market gains are exempt from business income encouraging more retail investments in the stock market
Tax payer friendly reforms introduced to align with Ease of Doing Business
TDS rates reduced from 10% to 5% for individuals
Income tax department transactions to be made in an electronic manner and human interface to be minimized to the core
Presumptive scheme for business increased from 1 crore to 2 crore
This step will make business people life easier and relaxing

Implications of these reforms

Project Saksham of digitalizing the Income Tax department is a direct implication of these tax reforms
Project Insight launched to monitor income tax transactions
Project e-sahyog launched to reduce the hassles of the small tax payers
This makes it easy for tax payers to pay tax online and eliminates their visit to the income tax department offices to pay taxes and lodge their grievances
Tax payers grievances are recorded online and addressed accordingly
The tax reforms aim to bring more transparency in the direct tax sector