Personal income tax slabs likely to be rationalised, salaried class may get relief, more money; move aims to boost spending

After last month's massive tax cut for the corporate sector by Finance Minister Nirmala Sithataman to make the sector more competitive, the government is planning to provide relief for the salaried class too by rationalising the personal income tax rates, said a media report. The move aims at increasing consumption.A government task force constituted to draft new personal income tax laws has reportedly recommended to simplify the current tax slabs and rationalise them, said a report in Hindustan Times quoting officials. Introduction of 10 percent tax rate for middle-income group people who earn between Rs 5 lakh and Rs 10 lakh is one of the recommendations which the task force had submitted on 19 August, said the report.The task force also reportedly suggested to remove cess, surcharge and several tax exemptions besides slashing tax rate of the highest slab from 30 percent to 25 percent, the report said quoting an official who is in the know of the matter.[caption id="attachment_4359703" align="alignleft" width="380"]

Representational image. Reuters.[/caption]Through rationalising the personal income tax slabs, the government aims to give a boost to the sluggish consumer demand by giving more money to the people.In August this year, the government panel on Direct Tax Code (DTC) had reportedly proposed zero tax levy on annual income between Rs 0-2.5 lakh, 10 percent on income between Rs 5 -10 lakh, and 20 percent on income of Rs 10 to 20 lakh.The report added that the task force has recommended 30 percent tax rate for income bracket of Rs 20 lakh - Rs 2 crore and 35 percent for the income of Rs 2 crore and above per annum.The finance ministry in November last year appointed Akhilesh Ranjan, Member (Legislation), Central Board of Direct Taxes (CBDT), as convenor of the task force after the retirement of Arbind Modi.Other members of the task force include Girish Ahuja (chartered accountant), Rajiv Memani (Chairman and Regional Managing Partner of EY), Mukesh Patel (Practicing Tax Advocate), Mansi Kedia (Consultant, ICRIER) and G C Srivastava (retired IRS and Advocate).— With PTI inputs