So what happens if the Kelkar tax proposals II are accepted and implemented by the government? Check out what happens to income tax, customs duties and excise duties. 

PERSONAL INCOME TAX

Income level ------------------ Rate

Below Rs 1 lakh -----------------Nil
Rs 1-4 lakh ---------------20% in excess of income over Rs 1 lakh
Over Rs 4 lakh -----------Rs 60,000 plus 30% of income in excess of Rs 4 lakh

• Tax rebate and deductions under Section 88, 80L, and 80CCC to be eliminated
• Eliminate all exemptions, do away with standard deduction

CORPORATE TAX

• Rate to be cut to 30% from 35.875%
• Cut depreciation rate for plant and machinery to 15% from 25%
• Continue with exemption on long-term capital gains on equity
• Dividend distribution tax by a company to continue at 12.5%

CUSTOMS DUTY

Basic Customs duty to be cut to a three-rate structure of 5%, 8% and 10% (raw materials 5%, intermediate goods 8% and finished goods 10%) consumer durables 20%, motor vehicles 50%, specified agricultural products and demerit goods 150%, crude oil 5%, petroleum products 10%

EXCISE DUTIES

• A new goods and service tax (GST) regime proposed, tax incidence of 20%
• States to be allowed to tax all services concurrently with the Centre
• Exemption for SSIs to be reduced from Rs 1 crore to Rs 40 lakh
• Area-based exemptions to be grandfathered

Also Read:

• The Kelkar Tax Proposals
• Kelkar reforms? GDP can grow to 13%
• The Kelkar report in 2 minutes
• Kelkar II: Corporates accept logic
• Kelkar II: Reading the fine print