Presentation on IFRS

Paras Shah (CA Final Student) (48 Points)

02 September 2008  

The Finance Ministry appears to be favorably inclined toward moderating income tax rates in view of the over 40 per cent growth in direct tax collections. “With improvement in voluntary tax compliance and tax administration, direct tax collections are growing by around 45 per cent. For voluntary compliance, we cannot have marginal tax rate that is too high,” Mr Parthasarthy Shome, Advisor to Finance Minister P Chidambaram, said at a conference.

Direct tax collections grew 44.86 per cent during April-November this year to Rs 1,45,053 crore. Mr Shome said income tax rates in India were comparable to those at international level and other countries in the region. However, if voluntary compliance increased, the whole structure needed to be looked at, he said.

According to sources the Finance Ministry is getting representations from political parties and industry chambers to review personal income tax rates, which vary from 10 per cent to 30 per cent in addition to the three per cent education cess and 10 per cent surcharge on income tax for income above Rs 10 lakh.