In fact, late by 5 years !
Context :
Highlights :
The
government is considering rationalising personal income tax rates in a move
that will result in the increase of
disposable incomes, especially among the middle class, and hopefully drive consumption and,
therefore, growth
Depending
on the impact the decision could have on revenue, various scenarios are being
considered, the officials added.
But the idea is to give at least a 5 percentage point benefit to every taxpayer,
One
of the options is to introduce a 10% slab
for people having taxable income between Rs 5 lakh and Rs 10 lakh.
Currently,
this slab attracts a 20% tax rate.
There
are also options to remove cess, surcharge and several tax exemptions and
reduce tax rate of the highest slab from 30% to 25%,
Currently,
taxable income between Rs 3 lakh and Rs 5 lakh attracts a 5% rate.
A
20% tax is levied on the second slab (Rs 5-10 lakh taxable income)
and 30% tax on income above Rs 10 lakh.
Income
up to Rs 2.5 lakh is, however, tax free
====================================================
Why 5 years too late ?
Following is an extract from my 5 year old email to the Cabinet Ministers :
Immediately modify PERSONAL INCOME TAX regime as shown
in last column below :
|
Tax Slab ( Rs L )
|
2019 Tax Rate ( % )
|
Now being considered
|
Proposed in my 2014 E
Mail below
|
|
|
Upto 2.5
|
Nil
|
-
|
Nil
|
|
|
2.5 – 5.0
|
5
|
NIL ( ? )
|
Nil
|
|
|
5 - 10
|
20
|
10 %
|
8 %
|
|
|
10 - 20
|
30
|
25 %
|
6 %
|
|
|
20 – 50
|
30
|
25 %
|
5 %
|
|
|
50 – 100
|
30
|
25 %
|
3 %
|
|
|
Ø 100
|
30
|
25 %
|
1 %
|
|
For justification for this INVERSE TAX REGIME , read :
Don't
Ask " How " ? /
07 April
2014 ]
Without doubt, cutting down on tax rates will :
Ø increase of
disposable incomes
Ø drive consumption and, therefore, growth
To know who will spend this “ Consumer Surplus “ on what kind of “ Consumption “ , and how will this boost the
Economy, read :
What
would they do ? [ 03 May 2016 ]
Proposed tax cuts might – temporarily - increase online sale of Amazon / Flipkart etc
by $ 10 billion over the forthcoming Diwali
holidays
But these cuts are unlikely to set into motion, that VIRTUOUS CIRCLE which alone can take India to a $ 5 Trillion GDP by 2024
What will ?
Better
late than Never [ 20 Sept 2019 ]
Listen
to the Lone Voice ! [ 28 Sept 2019 ]
===========================================================
01
Oct 2019
Rsvp : hcp@RecruitGuru.com
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