None
Skip to mainMr Jaitley is now the country's finance minister and in a month's time he would be delivering his first budget, which many hope would ease tax burden on the salaried class.
Here are the reasons why Mr Jaitley should rationalize income tax structure in India.
1) India's tax system is lopsided with an estimated 4 lakh people paying over 60 per cent of income tax collected in the country. Salaried Indians pay more income tax than high earners in US and China according to a survey. However, many millionaire farmers do not have to pay taxes as agricultural income is exempt from income tax.
2) Many of the current tax provisions were formulated more than a decade ago and need to be upgraded. For example, the tax benefit on housing loan interest (for self-occupied property) has not changed since 2001 even though property prices have gone up by 2-3 times during the same period.
3) Persistent high inflation has ruined household budgets and impacted savings. Consumer price or retail inflation in India was at 8.59 per cent in April year-on-year after running near or above 10 per cent for almost two years through the end of 2013.
4) Tax laws in India continue to be complex and lead to many disputes. According to an Assocham survey of 3,000 assesses, the tax administration's sole aim remains maximization the collections from a small group of people. Tax policies and administration are opaque while the refund process is fraught with complications, the survey noted.
5) A cut in income tax will leave more disposable income in the hands of individuals. It will enhance the spending power and will help drive certain sections of the economy that are dependent on discretionary spend such as autos.
According to the Assocham survey, the government must consider the following five changes to rationalize taxes and provide relief to taxpayers in India.
Mr Jaitley would be constrained by the fact that income tax accounts for over 20 per cent of the government's total tax revenue and any meaningful reduction in taxes, without widening the tax base, could put pressure on the government's fragile finance.
Mr Jaitley has just over a month to make up his mind.
🕑 24 Apr, 2024 09:17 AM
DoPT forwards 8th Pay Commission demand by IRTSA forwarded to Fin Min
🕑 23 Apr, 2024 10:01 AM
CGDA: Revision of rates of Allowances with DA rates increased to 50%
🕑 22 Apr, 2024 12:59 PM
CBDT: on DoPT order on regularization of Casual Workers
🕑 21 Apr, 2024 09:54 PM
DoPT Consolidated Instructions on SC, ST, OBC, PwD & EWS reservation
🕑 18 Apr, 2024 11:51 AM
Timeline extended for CGHS Beneficiary ID - ABHA ID linking
🕑 18 Apr, 2024 10:22 AM
APAR timelines for Central Civil Services extended to 30th April
🕑 10 Apr, 2024 08:25 AM
DoPT Guidelines on Departmental Promotion Committees
🕑 10 Apr, 2024 08:35 AM
Kendriya Vidyalaya Sangathan Admission Guidelines 2024-2025
🕑 05 Apr, 2024 01:23 PM
Kendriya Vidyalaya Balvatika Admission Schedule - 2024-25
🕑 02 Apr, 2024 09:25 AM
Kendriya Vidyalaya Admissions Open for 2024-25: Key Dates & Appln Process
🕑 01 Apr, 2024 09:23 AM
Kendriya Vidyalaya (KV) schools where Balvatika is functioning
🕑 14 Mar, 2024 02:07 PM
Govt bans 18 vulgar 18 OTT. See the list here
🕑 08 Mar, 2024 01:49 PM
Pension Scheme Gains Traction Across States, Despite Central Hurdles
🕑 20 Feb, 2024 11:17 PM
CGHS rate for general surgery applicable from February 1, 2024
🕑 08 Feb, 2024 10:19 AM
No loan interst change as RBI maintains repo rate at 6.50% for the 6th time