New Delhi: India should cut corporate tax rates and raise the income tax exemption limit for individuals to Rs 3.5 lakh annually for the upcoming Budget, industry lobby group PHD Chamber of Commerce and Industry said. PHD Chamber President Rajeev Talwar, in a statement issued to media, said that it looks forward to a “dynamic, inclusive and pragmatic budget” on February 1. In the Budget presented last year, the government cut the corporate tax rate to 25 percent for businesses with a turnover of up to Rs 250 crore.
“At this juncture, the economy needs further bold measures to boost the investment environment and to trigger demand growth to the next level,”- Rajeev Talwar
Talwar added that rationalisation of the direct taxes has been required, starting from the reduction in Corporate Tax.
Boost to the economy
“At this juncture, the economy needs further bold measures to boost the investment environment and to trigger demand growth to the next level,” Talwar said.
“This will provide a boost to economic growth and would result in widening of the Direct Tax net, enhance collections and promote compliance further.”
The PHD Chamber also recommended that the income tax exemption limit for individuals should be raised to Rs 3.5 lakh annually instead of Rs 2.5 lakh presently.
Marginal slab must be raised
“The maximum personal income tax rate should be towards 25 percent to increase the personal disposable income which will boost demand in the economy. The maximum marginal slab should also be raised to Rs 15 lakh instead of Rs 10 lakh,” Talwar added.
Talwar also pointed out that the reduction in GST rates by the government and consistent indirect tax revenue growth, demonstrate that the tax base is widening, while economic activity is rapidly expanding in India.