DMPQ: Post 1991 reform era has seen a major changes in the tax system. Discuss the changes( economics)

The 1991 is a hallmark year as it launched Indian into a new era of economic freedom. It majorly changed our economy from controlled to a free economy. One of the ingredient was tax reforms. The major changes one can observed in the tax system are as follows:

  • Widening of tax bases both by addition of tax payers and by addition of new taxes
  • Reduction in custom and excise duties
  • Lowering down of corporate taxes to give them vaccum to grow.
  • Rationalisation of personal income tax rates and slabs
  • Introduction of VAT in 2005. Thereby reduction of cascading effect of taxes.
  • Simplification of filing of return. Eg. ITR SAHAJ for salary tax payers
  • Introduction of GST
  • Tax revenue as percentage of GDP has increased.
  • Incorporation of IT infrastructure in Tax administration
  • Major emphasis on TDS by Income tax department

 

 

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