Which of the following statements is INCORRECT with respect to the India’s Tax Reforms Committee (TRC), 1991?

Correct option is D

The correct answer is (D) The committee suggested a phased reduction of the corporate tax to 10% and continuation of surcharge on corporate tax.

Explanation:

• The TRC did not recommend reducing corporate tax to 10%. Instead, it suggested a gradual reduction in corporate tax rates but not to as low as 10%.
• The surcharge on corporate tax was not recommended by the committee. It advocated for simplification of the tax structure.

Information Booster:

• LTCG Tax: Suggested a moderate flat tax on long-term capital gains after indexing for inflation.
• Minor’s Income: Recommended aggregation of minor’s income (except wage income) with the parent’s income.
• Tax Concessions: Suggested abolition of tax exemptions and rebates under saving schemes for simplification.

Additional Information:

• The 1991 Tax Reforms Committee played a key role in shaping India's modern tax system, contributing to economic liberalization.