The government may have to forgo as much as Rs 1.2 lakh crore in revenue a year if it were to cut tax rates in accordance with the recommendations the direct tax code (DTC) task force is understood to have made in its report submitted with finance minister Nirmala Sitharaman on Monday, analysts said. However, the potential revenue forgone could be substantially reduced if exemptions extended to both companies and individuals are fully withdrawn, they added. The Akhilesh Ranjan-led panel’s report is learnt to have proposed that the corporation tax rate be slashed to 25% across the board, including for foreign companies that currently pay about 40% tax. Any such reduction would essentially bring down rates for 0.7% of all firms that are currently paying taxes at 30%. However, these large companies contribute about 75-80% of total corporation tax collections, and a cut in their tax rate would bring down their contribution by an estimated Rs 90,000 crore annually.