The Indian Revenue Service Association (IRSA), an all-India body of tax officers, has put together a prescription for the government to help mobilise revenues and stimulate the economy amid the coronavirus pandemic.
Key among its recommendations to mobilise revenue include reintroducing a wealth tax for those over Rs 5 crore net worth or raising the tax on the super-rich (annual income above Rs 1 crore) to 40 percent.
The note, called F.O.R.C.E. (Fiscal Options & Response to Covid-19 epidemic) calls for the introduction of a 4 percent COVID Relief Cess, which it said could fetch the government Rs 15,000-18,000 crore.
The government could also consider introducing a coronavirus tax savings scheme, investments into which could bring tax deduction to the tune of Rs 2.5 lakh under Section 80C. The interest rate on this could be similar to other small savings schemes.
Further, it calls for the reintroduction of the inheritance tax, which was abolished in 1985.
Besides, it says the government could consider launching a 'Give It Up' scheme, a voluntary campaign for taxpayers to not opt for Section 80C exemption, on the lines of the successful LPG subsidy surrender scheme.
The note also suggested a number of steps to help rationalize expenditure and boost the economy.
It called for offering a direct cash transfer of Rs 3,000-5,000 every month for six months for the country's bottom 12 crore households, introduction of an MSME support scheme on the lines of one launched in the UK.
To help boost the healthcare sector, the government could consider giving a complete 3-year tax holiday for all corporates, firms and businesses in the healthcare sector.
It also suggested a number of steps to put incomes directly in the hands of the people, including introducing a coronavirus tax savings scheme.
Recent stock market losses made by retail investors should be allowed to be set off against income, it added
Besides, the government could consider incentivising purchase of automobiles and electronic items through tax deduction of payment of interest for loans. It can also increase the deduction of interest for housing loans.
Sources in the revenue department told CNBC-TV18 that the government had received representations from many bodies and will assess the proposals.
"Field formations of CBDT & CBIC will hold extensive discussions with trade, industry & individuals on measures for economic revival," the source said. "Tax field formations to submit areas wise report to rev dept on region-specific suggestions."
Below is a summary of all the key proposals recommended.
Short term measures
Short term measures
Medium term measures
Short-term measures - individuals
Short term measures - MSMEs
General rax relief for corporates
Relief for impacted sectors
Relief for services sector
First Published: IST