ANY FURTHER SHIFT among the taxpayers to the concessional personal income tax (PIT) regime from 60% reported so far will require further tweaks to make it more attractive, government sources said on condition of anonymity.
A few options in this regard are under consideration, they said, but hinted that these steps might get deferred beyond the interim Budget on February 1.
Tax experts say the government might have to increase the threshold for the highest PIT rate of 30% - which now kicks in at 15,00,000 - to at least 20,00,000.
Alternatively, the marginal rate itself may be reduced to 25%.
These changes would result in significant tax savings under the exemption-less regime, which was modified in the FY24 Budget to encourage taxpayers to discard the old regime, which allows sundry exemptions and deductions. However, any marginal increase in rebates - tax liability under the concessional regime is nil for annual income up to 7.5 lakh, thanks to rebates and the standard deduction of ₹50,000 - won't make any big difference, the experts reckon.
A higher threshold for the marginal tax rate would be suitable for a progressive income tax system, than reducing the highest tax rate, because the former benefits the low-income taxpayers more in relative terms (see chart).
Bu hikaye Financial Express Mumbai dergisinin January 15, 2024 sayısından alınmıştır.
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Bu hikaye Financial Express Mumbai dergisinin January 15, 2024 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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