The National Democratic Alliance (NDA) government led by Prime Minister Narendra Modi is considering reducing income tax rates for some categories of individuals. This information has come to light in a report by news agency Reuters, quoting two government sources. It has been said that the government can announce this to boost consumption. In July, Finance Minister Nirmala Sitharaman will present the full Union Budget for the financial year 2024-25. It is believed that a new income tax slab may be announced in it. The report says that a cut in individual tax can boost consumption in the economy and increase savings for the middle class.
Those with annual income of more than Rs 15 lakh will get relief!
According to the news, individuals whose income is more than Rs 15 lakh per annum (up to a certain amount which is yet to be determined) may get relief in income tax. It is also being told that the government may also consider reducing the income tax slab for annual income of Rs 10 lakh. According to the news of Livemint, the government is discussing a new limit for income taxed at the highest rate of 30 percent under the old tax system. India’s GDP (gross domestic product) has grown at a strong rate of 8.2 percent in the financial year 2023-24, while consumption has grown at half that rate.
Voters are worried about inflation, unemployment and decreasing income
The survey after the Lok Sabha elections 2024 had revealed that voters were worried about high inflation, unemployment and declining incomes. Claiming to form the NDA government, PM Modi had said that his government would focus on increasing the savings of the middle class and improving their quality of life. There is also talk that the government may make changes to the single tax scheme introduced in 2020, under which 5 per cent to 20 per cent tax is levied on annual income up to Rs 15 lakh and 30 per cent tax on income above Rs 15 lakh.
A report says that when a person’s income increases five times from Rs 3 lakh to Rs 15 lakh, the income tax rate increases six times, which is quite high. The government has set a target to limit the fiscal deficit to 5.1 percent of GDP in the financial year 2025.
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