Analysis of Tax Reformation

On Budget 2020

PRESENTED BY:
Rajesh Kumar Dash
Jyoti Prakash Mallick
Alok Kumar
Satapathy
Umesh Panigrahi

GUIDED BY :
Mrs. Pragyan Sarangi
 INTRODUCTION
Basic objective : To impose heavy taxation on high income
groups.
Redistribute it among people of weaker section.

• To creation wealth for target of 5 trillion economy

• To increase the rank of ease of doing business
• To attract FDI investors

 Taxation System

 GDP Growth

 Tax Revenue
Tax revenue from various sources and
estimations (2020-21)

 Revenue receipts : 20,20,926 cr

 Revenue deficit 6,09,219 cr
 Fiscal deficit 7,96,337 cr
percentage Borrowing
10 nd other
6 20 liabilities
corporatio
n tax
18
income tax
18
custom
union
excise
7
4 duties
17
GST
 GDP GROWTH STATISTICS

In Percentage

9 8.2 2016-
8 7.2 6.8 17
7 6
5 2017-
6
5 18
4 2018-
3 19
2 2019-
1 20
0
2020-
7 8 9 0 1
-1 -1 -1 -2 -2 21
6 7 8 9 0
1 1 1 1 2
0 0 0 0 0
2 2 2 2 2
Tax Revenue Collection

Direct Tax revenue shortfall : 2.5 lakhs cr (1.2% of GDP)

 Reformations in Indirect Tax
GST- Simplification
 sms based filling for nil return

 Centralized system of E-invoice system in GST

 Aadhaar based verification of tax payers

 The surplus in the compensation fund collected

for FY17 and FY 18 would be transferred to the
compensation cess fund.
Reformations in Indirect Tax
• 5% health cess to be imposed on
imports of medical devices, except those
exempt from basic custom duty.

Taxation Others :
• Instant pan to be allotted online
through Aadhaar.
• ‘ Vivad se vishwas’ scheme
• Faceless appeals to be enabled by
amending the income tax act.
 Direct Tax
Reformation
Corporation Tax (30% to 25%)
(25% to 15%)
Income Tax (Two Tax Regime )
(Around 70 of the existing exemption and
deduction more than 100 to be removed
in the new simplified regime).

DDT(Dividend Distribution Tax) Removal

 Tax Slabs
Income (Rupees) Old rate New rate Remark

Upto 2.5 Lakhs 0 0

2.5 lakhs – 5 lakhs 0 0 If net taxable
income is<5
lakh
2.5 lakhs – 5 lakhs 5% 5% If net taxable
income is>5
lakh

5 lakhs – 7.5 lakhs 20% 10%

7.5 lakhs- 10 lakhs 20% 15%
10 lakhs – 12.5 lakhs 30% 20%
12.5 lakhs – 15 lakhs 30% 25%
>15 lakhs 30% 30%
 Reflections
 Tax rate cut Increase disposable income
Increase purchasing power Increase
demand Economic growth
 DDT removal Relaxation for firm
Increase rank in ease of doing business
More investment GDP growth
 DDT removal Increase taxable income
Increase tax revenue
GST simplification Motivate to tax payer
Addition of more no. of tax payer
Increase tax revenue
 Corporation tax rate cut Increase cash flow
 Conclusion

Theme: Ease of living