Explanation:

 Easwar Panel On Income Tax
The 9-member Justice Easwar Panel has taken the first step to simplify direct tax laws. In its first batch of recommendations, the panel has suggested a few substantive changes to tax policy which could be addressed in the coming Budget.
Major recommendations:
• TDS rates for individuals and HUFs to be reduced to 5 per cent as against the present 10 per cent.
• This panel also recommended enhancement and rationalization of the threshold limits of TDS.
• Presently, TDS is applicable on Rs 2,500 in case of payment of interest on securities and on interest on NSS accounts, Rs 5,000 for payment of interest on private deposits and commission or brokerage and Rs 10,000 for payment of bank interest.
• This panel suggested on raising the threshold for TDS to Rs 15,000 from Rs 2,500 annually. Similarly, for other interest earnings the limit is recommended to be raised to Rs 15,000 from current Rs 10,000 for bank deposits and Rs 5,000 for others.
• The panel recommended raising TDS limit for payments to contractors from current limits of 30,000 for single transaction and 75,000 annually to Rs 1 lakh annual limit.
• TDS limit on rent income threshold for TDS is proposed to be raised from Rs 1.8 lakh annually to Rs 2.4 lakh.
• The threshold for fees for professional or technical services is recommended to be raised to Rs 50,000 from Rs 30,000 but TDS rate is proposed to be retained at 10 per cent.
• It proposed deferring the contentious Income Computation and Disclosure Standards (ICDS) provisions and making the process of refunds faster.
• The committee has asked the income-tax department to desist from the practice of adjusting tax demand of a taxpayer whose tax return is under assessment against legitimate refunds due.
• It has also proposed deletion of a clause that allows the tax department to delay the refund due to a taxpayer beyond six months and suggested a higher interest levy for all delays in refunds.
• The panel also proposed that stock trading gains of up to Rs.5 lakh will be treated as capital gains and not business income, a move that could encourage more retail investments in the stock market.
• It also sought to provide an exemption to non-residents not having a Permanent Account Number (PAN), but who furnish their Tax Identification Number (TIN), from the applicability of TDS at a higher rate.
• The committee also recommended that most of the processes of the income-tax department should be conducted electronically to minimize human interface. To this effect, it suggested that processes such as filing of tax returns, rectification of mistakes, appeal, refunds and any communication regarding scrutiny including notices, questions and documents sought should be done electronically.
• To make it easy for small businesses, the committee recommended that the eligibility criteria under the presumptive scheme be increased to Rs.2 crore from Rs.1 crore.
• It also recommended launching a similar scheme for professionals. The presumptive tax is levied on an estimated income and makes life (and work) easier for small businesses. Under the presumptive income scheme, such professionals or businesses will not need to maintain a book of accounts but just pay tax based on presumptive income calculations.