Finance Minister Seeks Action Against IRS Officers – Burning Issues – Free PDF

Recommendations

• One of the recommendations of the report was the introduction of the wealth tax to be charged to those with a net worth of ₹5 crores or more.
• The IRS officers suggested levying a one-time 4% ‘COVID Relief Cess’ on individuals with more than ₹10 lac annual income.

Increasing Income tax

• The document also proposed taxing individuals with more than ₹1 crore annual income at 40%, which is 10% higher than the current 30%. As such, the income tax liability on such individuals will be close to 56%

Other Recommendations

• The IRS officers also recommended increased surcharges for foreign companies in India
• Creation of an amnesty scheme to collect unpaid tax
• Sanctioning of ‘Coronavirus Savings Certificates’ for investments not more than ₹2.5 lacs for 5 years
• Taxation of multinational firms making royalty payments to their parent companies and 3% equalisation charge to e-commerce companies.

Government Reaction

• The Finance Ministry discarded the report and directed Central Board Of Direct Taxes Chairman P C Mody to seek explanation from these officers for writing such ill-conceived view in public without having any authority to do so. Further, the ministry added

Central Board of Direct Taxes

• “CBDT has issued chargesheets to the three senior IRS officers for violation of CCS (Conduct) Rules, 1964 and has divested them of their current responsibilities,” said the official.

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