India Is Now One The Most Highly Taxed Countries Of The

1639 WordsApr 27, 20177 Pages
India is now one the most highly taxed countries of the world .Almost every conceivable source of tax revenue has been bought into the tax system .The ratio of tax revenue to national income has increased to 23% .Over the years both direct and indirect taxes have become more and more progressive in general .In so far as income inequality is concerned the progression infused into the system has helped reducing gap between the rich and the poor to some extent .The reduction of marginal icome tax rate though appears to be competitive to progressivley in tax structure has in effect helped reduction of inequality indirectly through larger compliance and discouragement of tax evasion among the rich people The increase of exemption limit has…show more content…
Later on the year 2016-17 Wealth Tax was scrapped and totally abolished on all assets With respect to Income taxes many changes have been made in recent years with a view to simplify the structure. Many concessional provisions were provided on the view to simplify the taxation system on advice of Enquiry Commission (1954-55) was replaced by a simple provision of standard deduction .To simplify still further the Union Budget 2005-06 withdrew standard deduction and almost all provisions of tax concession. Against this step however the basic exemption limit was raised .The exemption limit which was Rs 40000 in 1995-96 budget was raised periodically and the 2012-13 budget increased the threshold limit to Rs 2 Lakh .Furthermore the threshold limit was increased to Rs 2.5 lakhs in the 2015-16 Budget Marginal rate of corporation tax which was 45 % in 1991-92 was brought down to 35% and then in 2005-06 to 30 % for domestic companies .An important deduction was depreciation @ 15% for plant and machinery .A 10 percent surcharge was imposed on corporate tax in 1999-200 .In the Current Budget
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