Govt may tighten presumptive taxation norms, do away with some deductions

The slab rationalisation exercise will cost the exchequer Rs 70,000-80,000 crore

The government, given the grim revenue position and clamour for tax cuts for the salaried classes, is considering a tighter presumptive taxation scheme.

This is among the measures being examined to make rationalising income-tax slabs a revenue-neutral exercise in the upcoming Budget. The direct tax panel to overhaul income-tax legislation has recommended this. It has projected a revenue gain of close to Rs 10,000 crore if such a measure is implemented.

The presumptive taxation scheme allows businesses having a turnover of less than Rs 2 crore in a financial year to estimate their net income at 8 per cent of the turnover