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IRS Officers offer tips on how to revive the Economy of India

Raising income tax rate to 40 per cent for those who earn over Rs 1 crore a year, re-introduction of wealth tax, effecting a one-time Covid-19 cess of 4 per cent on taxable income of over Rs 10 lakh, direct cash transfer of up to Rs 5,000 a month for the poor, a three-year tax holiday for all corporates and businesses in the healthcare sector — these are some of the recommendations made by over 50 officers of the Indian Revenue Service (IRS) to help the economy recover from the lockdown.
 
Details of the Plan
 
One: Super-rich tax. It said that tax should be increased from 30 to 40 percent on people with income above Rs. 1 crore. Apart from this, Estate Tax or Wealth Tax should be imposed on people with an annual income of more than Rs. 5 crore. These suggestions given for short intervals mean a period of three to six months. With the tax-surcharge imposed on the super-rich in the budget, the government is expected to get only Rs 2,700 crore. In such a situation, it has been suggested to increase the tax slab for the super-rich. Taxpayers with a taxable income of more than Rs 1 crore fall in the category of ultra-rich.
 
Two: Increasing surcharge on foreign companies operating in the country to raise additional revenue during the medium term i.e. 9 to 12 months. These companies now have a surcharge of two percent on income of one to ten crore rupees and five percent surcharge on income of more than Rs.10 crore. Imposition of Corona virus cess to raise additional revenue. A one-time four percent COVID relief cess will help finance the necessary capital investment. According to preliminary estimates, Rs 15,000 to 18,000 crore can be raised from such cess.
 
The recommendations are part of a policy paper titled “Fiscal Options & Response to Covid-19 Epidemic (FORCE), which the IRS Association presented to the Prime Minister’s Office (PMO) and the Union Finance Ministry Saturday, sources in the organisation said. It has also been sent to the Central Board of Direct Taxes (CBDT), the sources added.
 
'Super-rich have more responsibility' 
 
The paper, a copy of which is with The Better Andhra, delves into several steps the officers think are needed to revive the economy, by raising additional revenue without burdening the common man.
 
“The government needs to spend considerably more to revive the economy and it needs to raise additional revenue, but in ways that must not burden the already distressed common man,” the paper says. “In times like these, the so-called ‘super-rich’ have a higher obligation towards ensuring the larger public good.”

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