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The present rate together with surcharge for Individual is high Maximum marginal rate is 35.10 percent. The corporate Income tax rate together with Surcharge is now 39.55 percent. The Company is also subjected to a Dividend tax of 15 percent plus two percent Surcharge on distribution of profit to the shareholders. So Company in effect end with paying more than 50 percent of its profit, which is extremely unfair. The Challaiyah Committee has clearly established the link between lower tax to that of higher compliance level. However such spirit which was seen in some of the post 95 Budget is absent now. The Reforms in tax rates is required.
Again the Incometax slab is currently 10 percent for income between 50000 to 60000 and than it is 20 percent. Maximum of taxpayers is subjected to twenty percent slab, in effect. So the 10 percent slab should be broadend e.g. 50000 to 75000 it should be 10 percent only.
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