Raja Chelliah Committee

In 1991, the Government setup the Tax Reforms Committee under the chairmanship of Raja J. Chelliah to examine the existing tax structure and suggest measures to simplify it.

• The committee submitted its report in parts. The first draft was submitted in 1991, followed by other drafts in 1992 and 1993. The Committee suggested tax reform in both the direct and indirect taxes.

Important Recommendations on Direct Taxes: The tax rates should be brought down and the difference between the entry rate and the highest marginal rate should be narrowed down and bring the agricultural income under the tax net.

• The corporate tax rates should be brought down and the difference between the tax rates of domestic and foreign companies should not exceed 10%.
• The government later on appointed Kelkar Committee in 2002 which further provided the roadmap for tax reforms in the country.