Speaking at an industry gathering in Delhi On Friday, Chairman of the Task Force on Direct and Indirect Taxation, Vijay Kelkar announced that any withdrawal of tax exemptions which hurts corporate income will be compensated for with tax incentives for individual shareholders, under the terms of his controversial tax reform package.
According to an Economic Times report, Mr Kelkar defended the proposals put forward by the taskforce, which include an increase in the personal tax exemption limit which would take many ordinary Indians out of the tax loop, and the removal of various corporate tax exemptions in the interests of simplifying the country's tax system and cracking down on rampant tax evasion.
'Arguing in favour of withdrawal of exemptions, he stated that corporates serve as a vehicle for individual shareholders. Any withdrawal of exemptions that hurt corporate income would be compensated by the simultaneous withdrawal of dividend tax and capital gains tax on shareholders. This would also safeguard the interest of small retail investors,' the Economic Times revealed.
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