What were the tax reforms that were brought in India?

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What were the tax reforms that were brought in India?

Further reform in 1997 saw tax rates reduced to 10\%, 20\% and 30\% in the three brackets. The TRC recommended custom tariff rates of 5\%, 10\%, 15\%, 20\%, 25\%, 30\% and 50\% by 1997-98. This meant a considerable rationalisation of more than 100 rates, ranging up to 400\%.

What are the need for tax reform?

Tax reform can reduce tax evasion and avoidance, and allow for more efficient and fair tax collection that can finance public goods and services.

What are the methods of tax collection?

There are three important types of tax collection methods: cadastral, at the source (before the receipt of the income) and through self-assessment (at the declaration of the income).

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What is the process of taxation?

Introduction. Taxation is the means by which a government or the taxing authority imposes or levies a tax on its citizens and business entities. From income tax to goods and services tax (GST), taxation applies to all levels.

What are the ways to save tax in India?

Here’s a list of popular investment options to save tax under section 80C.

  1. Public Provident Fund.
  2. National Pension Scheme.
  3. Premium Paid for Life Insurance policy.
  4. National Savings Certificate.
  5. Equity Linked Savings Scheme.
  6. Home loan’s principal amount.
  7. Fixed deposit for a duration of five years.
  8. Sukanya Samariddhi account.

How are taxes collected in India?

The tax structure in India is divided into direct and indirect taxes. The taxation system in India is such that the taxes are levied by the Central Government and the State Governments. Some minor taxes are also levied by the local authorities such as the Municipality and the Local Governments.

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What are the measures taken by the Government of India to reform?

The Government appointed a Tax Reforms Committee under Prof Raja Chelliah to lay out agenda for reforming India’s tax system. This TRC came up with three reports in 1991, 1992 and 1993 with several measures, which can be summarized in these points: Reforming the personal taxation system by reducing the marginal tax rates.

What are the tax reforms measures?

The tax reform measures aimed at increasing resource mobilisation, i.e., revenue buoyancy and removing anomalies and distortions in the country’s tax structure through restructuring, simplification and ra­tionalisation of taxes; tax compliance both direct and indirect.

What is the history of tax reform in India?

The efforts to reform India’s tax system began in mid 1980s when the government announced a Long Term Fiscal Policy, 1985. This policy recognized that the fiscal position of the country is going downhill and there was a need to make changes in the taxation system.

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How has the personal income tax system been restructured in India?

The personal income tax system has been restructured by lowering rates, introducing few slabs, providing a higher exemption limit and by reducing saving-linked tax exemption. Initial exemption limit for the levy of income tax has been raised from Rs. 22,000 in 1991 to Rs. 1,00,000 in 2007-08.