Finance ministry junks proposal by IRS officials to hike tax for super rich: Sources

PTI, Apr 26, 2020, 8:57 PM IST

New Delhi: A report of 50 IRS officers of the I-T department on revenue mobilisation and economic impetus to fight COVID-19 pandemic is ill-conceived, and an act of indiscipline, as well as violation of service conduct rules, Finance Ministry sources, said.

These officers from the Indian Revenue Service (IRS) Association in a report titled ‘FORCE (Fiscal Options & Response to the COVID-19 Epidemic’) suggested raising tax rate to 40 per cent for those with income above Rs 1 crore, from 30 per cent at present, and levy of wealth tax for those with over Rs 5 crore annual income.

They also suggested levy of a COVID Relief Cess of 4 per cent on those with taxable income of more than Rs 10 lakh to help mobilise revenue for funding the relief work. The Finance Ministry, sources said, has directed Central Board of Direct Taxes (CBDT) Chairman P C Mody to seek explanation from these officers for writing such ‘ill-conceived views’ in public without having any authority to do so.

The ministry said that neither IRS Association nor any group of officers mentioned in the said report were ever asked by the government to give any report on the subject.

“It was not even part of their duty to prepare such a report. Therefore, it is prima-facie an act of indiscipline and violation of conduct rules which specifically prohibits officers to go to media with their personal views on official matters without taking prior sanction or the permission of the government. The concerned officers will have to explain their misconduct,” one of the sources said.

They further said that the suggestions given in the report do not reflect views of the CBDT or the Finance Ministry. The report, dated April 23, was submitted to the CBDT Chairman. The ministry sources further said that releasing the report in the media through IRS Association’s twitter and website is ‘an irresponsible act’ of few officers.

In a tweet, IRS Association said: “The paper FORCE by 50 young IRS officers suggesting policy measures had been forwarded by IRSA to CBDT for consideration. It does not purport to represent the official views of the entire IRS, or the IT Dept”.