The Kelkar task force on direct and indirect taxes on Friday recommended that corporate tax for domestic firms be cut to 30 per cent and foreign firms to 35 per cent from 36.75 per cent over three years beginning with the next Budget.

The panel, which submitted its report to the finance minister, also recommended there should only be a two-tier structure for personal income tax instead of the current three.

It said incomes between Rs 100,000 and Rs 400,000 should be taxed at 20 per cent and those above Rs 400,000 at 30 per cent.