Income tax slab may come down to 25 per cent
Posted on: 16/Jan/2018 11:06:20 AM
The Government may reduce the highest slab in income tax from 30 per cent to 25 per cent in the forthcoming Union Budget for 2018-19.
According to highly placed sources, this is applicable on those having income of more than Rs 10 lakh per annum. The sources say that the move seems to be aimed at widening the gamut of direct tax - quite similar to how the indirect tax net has increased with the introduction of Goods and Service Tax (GST).
Say the sources, While the 30 per cent tax slab could be reduced to 25 per cent, the possibility of introduction of a new tax slab could not be ruled out as this would help in increasing direct tax collections. Concerned over the fact that in a nation of over 125 crore people, hardly an average of three crore people file their returns and in fact during the assessment year 2014-15 only 25 lakh taxpayers had declared their annual income of over Rs 10 lakh (which is a measly 8 per cent of the total taxpayers), the Government is said to be considering the aforementioned proposals. The proposal for reducing the highest income tax slab is learnt to have been discussed by the Prime Minister`s Office (PMO) with Finance Ministry and Niti Aayog officials.
If the proposed move is introduced in the forthcoming Union Budget then direct tax collections could get a major boost in the forthcoming financial year. As of now there is no income tax on the income group of Re 1 to Rs 2,50,000 per annum, while the income tax levied on the income group of Rs 2,50,001 to Rs 5,00,000 per annum is 5 per cent.
