Taxes may be lowered from next financial year
Posted on: 22/Dec/2016 10:58:54 AM
Reports have said that the Narendra Modi government is considering a proposal to revise the base Income Tax slab and increase it up to Rs 4 lakh per annum from the current Rs 2.5 lakh per year. A report in a leading TV news channel said that the government may announce revised tax slabs before the announcement of Uttar Pradesh assembly election dates. It also said that while people in the Rs 4-10 lakh income group may be taxed at 10 per cent, 15 per cent tax is likely for the 10-15 lakh income group. Similarly, while people in the Rs 15-20 lakh income group may have to pay 20 per cent tax, 30 per cent tax may be imposed on those having income above Rs 20 lakh.
However, government spokespersons said that the report was baseless and unfounded. Earlier this month, Union Finance Minister Arun Jaitley had said, The government may reward the common man by lowering both direct and indirect tax rates in Budget FY18 as demonetisation is set to expand the tax net.
While the central bank is remonetising by constantly releasing new banknotes, which would be significant in the next three weeks, the strategy is to make future transactions substantially digital to reduce dependence on cash. Once the black money hoarders are substantially digital, they will get caught in the tax net.
Therefore, the future taxation level would be much higher than what is currently being collected. This would also enable the government at some stage to make taxes more reasonable which will apply to both direct and indirect taxes.
