Prepaprations have already begun for Budget 2020. Earlier this month, the ministry of finance, through a circular dated 11 November, requested suggestions from the industry and trade associations regarding changes in direct and indirect taxes in Budget 2020.here has been long-standing demand for a new law altogether, to bring the tax rules and laws in line with the present requirements, given that the current Income-tax Act was formalized about 60 years ago, though there have been many amendments and changes ever since. The intent of introducing Direct Tax Code (DTC) was proposed in 2005, but its drafting has been under process for more than a decade now.Though a couple of months ago, the task force assigned with the duty to draft DTC submitted a report to the finance ministry, the recommendations are not out in the public domain yet.
In essence, DTC is meant to simplify direct taxes. Till date, the government has not given any indication on when the draft DTC will be made public or get implemented. However, we can expect some reforms to be incorporated in the upcoming budget.
Rationalization of tax rates and benefits
After the recent cut in corporate tax rates, there is speculation that the government may reduce the tax slab rates applicable to individual taxpayers. Experts have mixed views on that.
“Subsequent to reduction of corporate tax rate, there should be reduction in income tax rates for individuals for a consumption-led revival of the economy and putting more money in the hands of the common man," said Amit Maheshwari, partner, Ashok Maheshwary & Associates LLP, a chartered accountancy firm.
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