Probability of reduction of personal income tax: Slab will vary: center

New delhi date. October 24, 2019, Thursday

"The central government is planning to provide tax relief to the citizens to ease the ongoing recession, increase consumer demand and accelerate economic growth," an official directly involved in the matter said.

The government is planning to increase the limit on taxable income and, in particular, the tax deduction of 30%, to slab a million rupees. Along with these measures, the official said that active consideration was also being taken to eliminate some tax breaks, including house rent payments and interest accrued on bank deposits.

This may have been the provision for the Union Budget to be released in February. However, the response to this news from the finance ministry could not be ascertained. If the government changes personal income, this will add to the steps taken by the government to increase economic growth in recent months.

In the last six years, the pace has slowed down. In addition to the corporate tax cuts last month, the government also canceled levies on foreign funds, gave banks ten billion rupees, relaxed foreign direct investment rules and consolidated banks.

A 22 percent reduction in corporate tax means that the company will be taxed lower than those who fall in the 30 percent rate bracket. This is why personal income tax relief is considered.

While Finance Minister Nirmala Sitharaman is planning to reduce the fiscal deficit to 3.3 percent of GDP this year, the government has little left to provide new relief after the corporate tax cut. The government is now relying on companies and individuals to buy more and increase revenue revenue.

If a person's annual income is more than half a million rupees, he is charged a tax of five percent. This is higher than the average of 29.99 percent in Asia. Only five percent of the country's total population pays taxes and the country's tax-to-GDP ratio is about 11 percent, which is lower than the global average. For all these reasons, the government is planning to reduce taxes.