Major Recommendations of the Task Force on Direct Taxes appointed under the Chairmanship of Shri Vijay L Kelkar

Major Recommendations of the Task Force on Direct Taxes appointed under the Chairmanship of Shri Vijay L Kelkar are as follows:

Task force on direct taxes was set up under the Chairmanship of Shri Vijay L Kelkar, to recommend measures Answer Indicator for simplification and rationalization of the taxes. Major recommendations were as follows

Tax Administration:

a. Expansion of tax payer services both qualitatively and quantitatively. Easy access to tax payers through internet and e-mail and extension of facilities such as tele-filing and tele-refunds.

b. Extension of PAN to cover all economic agents.

c. Processing of all returns and issue of refunds within four months.

d. Introduction of transparency and objectivity in the process of selection of cases.

e. Establishment of a tax information network on a build, operate and transfer basis to speed up the process of modernization and consequent simplification and rationalization of the scheme of tax deduction at source.

f. Abolition of the requirement of obtaining a tax clearance certificate before leaving the country.

g. Restriction of this requirement to proclaimed offenders.

h. Enhance accountability of officers and staff.

i. Empowering CBDT with appropriate administrative and financial powers.

Personal Income Tax:

a. Increase in exemption limit to Rs1 lakh for the general category of tax payers. A higher exemption limit of Rs 1.50 lakh for widows and senior citizens.

b. Introduction of a two rate personal income tax schedule 20% upto an income of Rs 4 lakh and 30% for income exceeding Rs 4 lakh. Elimination of surcharge on personal income tax.

Elimination of Standard Deduction:

a. A tax rental agreement whereby states would authorise the Central Government to impose income tax on agricultural income and assign the proceeds to states.

b. Elimination of tax incentives under Section 88, 80L and interest income under Section 10.