Jaitley hints at lowering taxes
New Delhi, Dec 27, 2016, DHNS:
Rates must be globally competitive: FM
Finance minister Arun Jaitley on Monday hinted at lower rates of personal and corporate taxation to bring more people into the tax net.
“What you need is a broader base of economy for which you need a lower level of taxation. You need to manufacture and provide services which are competitive in character. Therefore your tax rates will have to be globally competitive,” he said, addressing Indian Revenue Services officials.
His remark comes in the wake of speculation that the government's fourth budget is likely to make sweeping changes in the way incomes are taxed in India.
Early budget
Jaitley will present his budget on February 1, a month earlier than usual.On earlier occasions, Jaitley has said revenues garnered thanks to demonetisation could be used to lower the tax burden on citizens.
Sources told DH the central government might reward tax payers who have backed demonetisation with a revision in rates. At present, incomes above Rs 2.5-5 lakh are taxed at 10%, incomes between Rs 5-10 lakh at 20%, and incomes above Rs 10 lakh at 30%.
According to some officials, the tax rate may remain the same but the tax exemption ceiling may go up from the present Rs 2.5 lakh. More tax slabs are also being considered.
“Many options are on our table. Let us see what can be done for maximum benefit of people,” an official said.
Jaitley has also hinted his budget will boost the public expenditure necessary to accelerate economic growth and manufacturing. In the 2016 Budget speech, Jaitley had announced he intended to bring down corporate tax to 25% in the next four years.
“What you need is a broader base of economy for which you need a lower level of taxation. You need to manufacture and provide services which are competitive in character. Therefore your tax rates will have to be globally competitive,” he said, addressing Indian Revenue Services officials.
His remark comes in the wake of speculation that the government's fourth budget is likely to make sweeping changes in the way incomes are taxed in India.
Early budget
Jaitley will present his budget on February 1, a month earlier than usual.On earlier occasions, Jaitley has said revenues garnered thanks to demonetisation could be used to lower the tax burden on citizens.
Sources told DH the central government might reward tax payers who have backed demonetisation with a revision in rates. At present, incomes above Rs 2.5-5 lakh are taxed at 10%, incomes between Rs 5-10 lakh at 20%, and incomes above Rs 10 lakh at 30%.
According to some officials, the tax rate may remain the same but the tax exemption ceiling may go up from the present Rs 2.5 lakh. More tax slabs are also being considered.
“Many options are on our table. Let us see what can be done for maximum benefit of people,” an official said.
Jaitley has also hinted his budget will boost the public expenditure necessary to accelerate economic growth and manufacturing. In the 2016 Budget speech, Jaitley had announced he intended to bring down corporate tax to 25% in the next four years.
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