Income Tax Department rejects report suggesting higher income tax on super-rich

Income Tax Department has rejected a report by a team of Indian Revenue Services (IRS) officers suggesting the government to hike income tax rates for super-rich and a higher levy on foreign companies as a short term measure to deal with cash issues amid the coronavirus crisis.

This development was first reported by PTI. The suggestions were part of a paper titled 'Force', which stands for 'Fiscal Options & Response to the COVID-19 Epidemic', submitted by the Indian Revenue Service (IRS) Association to CBDT (Central Board of Direct Taxes) Chairman P C Mody, PTI had reported.

See Income Tax Department Tweet Here:

(2/3)No permission was sought by the officers before going public with their personal views & suggestions, which is a violation of extant Conduct Rules. Necessary inquiry is being initiated in this matter.@nsitharamanoffc @Anurag_Office

— Income Tax India (@IncomeTaxIndia) April 26, 2020

"It is reiterated that the impugned report does not reflect the official views of CBDT/Ministry of Finance in any manner," the income tax department said in a tweet. "No permission was sought by the officers before going public with their personal views & suggestions, which is a violation of extant Conduct Rules. Necessary inquiry is being initiated in this matter," the tweet further said.

The clarification came after the department found media reports circulating on social media regarding suggestions by a few IRS officers for tackling Covid-19 situation.

"It is unequivocally stated that CBDT never asked IRS Association or these officers to prepare such a report," the tweet said.

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Short term measures

Some of the short term measures suggested in the paper included a super-rich tax by raising the highest slab rate to 40 per cent for those with an income above Rs 1 crore from 30 per cent and re-introduction of wealth tax for those with over Rs 5 crore annual income. Short term refers to a time period of 3-6 months.