What the future Budgets could do if the Kelkar proposals are accepted

THE KELKAR REPORT - II

Rate

Below Rs 1 lakh

Nil

Rs 1-4 lakh

20% in excess of income over Rs 1 lakh

Over Rs 4 lakh

Rs 60,000 plus 30% of income in excess of Rs 4 lakh

 

Tax rebate and deductions under Section 88, 80L, and 80CCC to be eliminated

Eliminate all exemptions, do away with standard deduction

 CORPORATE TAX

• Rate to be cut to 30% from 35.875%
• Cut depreciation rate for plant and machinery to 15% from 25%
• Continue with exemption on long-term capital gains on equity
• Dividend distribution tax by a company to continue at 12.5%
  

 CUSTOMS DUTY

Basic Customs duty to be cut to a three-rate structure of 5%, 8% and 10% (raw materials 5%, intermediate goods 8% and finished goods 10%) consumer durables 20%, motor vehicles 50%, specified agricultural products and demerit goods 150%, crude oil 5%, petroleum products 10%

 EXCISE DUTIES

• A new goods and service tax (GST) regime proposed, tax incidence of 20%
• States to be allowed to tax all services concurrently with the Centre
• Exemption for SSIs to be reduced from Rs 1 crore to Rs 40 lakh
• Area-based exemptions to be grandfathered