Budget 2019 India: The Industry chamber has suggested that 30 per cent Income tax rates should be applied to individual earning over Rs 20 lakh per annum
Budget 2019 India: The Narendra Modi government at the Centre has been receiving suggestions and recommendations pertaining to Income Tax changes that should be considered for the upcoming Budget this year. The Federation of Indian Chambers of Commerce & Industry (FICCI) in its pre-Budget recommendations for 2019-20 has suggested that the central government make changes in the income tax slab in the upcoming Budget 2019. Finance Minister Arun Jaitley will table Budget 2019 in the Parliament on February 1.
The Industry chamber has suggested that 30 per cent Income tax rates should be applied to individual earning over Rs 20 lakh per annum. Currently, individuals aged 60 years, with an annual income of over Rs 10,00,000 need to pay the 30 per cent income tax. Apart from this, the FICCI has suggested income tax exemption should be raised to Rs 200 per meal from the existing limit of Rs 50. Rationalisation of tax structure, whether individual or on the corporate front, has been a long-standing demand of industry bodies.
FICCI has also suggested that the central government slash the corporate tax rate to 25 per cent without the turnover condition citing that this will encourage economic growth and increase overall tax collections. According to FICCI businesses face high tax cost which leads to increased cost of production. This in turn results in lower surplus for both reinvestment and expansion. The industry body is of the view that the 30 percent basic corporate tax rate along with 20 per cent dividend distribution tax rate makes the effective tax cost very high for a company.
In its pre-budget memorandum, FICCI suggested a reduction in the rate of Minimum Alternate Tax even as termed the existing rate of 18.5 per cent is “quite high”. The FICCI said that the burden of MAT should also be gradually reduced from the current levels to a rate which will be “commensurate with the phasing out of tax exemptions and incentives.”