This information may make you glad if you pay income tax annually. Yes, taxpayers will benefit if Finance Minister Nirmala Sitharaman follows the advice of eminent economist Surjit Bhalla. Although India is not the richest nation in the world, Surjit Bhalla, a renowned economist, claimed that because of the country’s high revenue collection, the income tax rate should be lowered from its current level of roughly 40% to 25%.
The economy of India is very globalized.
He stated that in order to hasten economic growth, the tax rate must be reduced. We have the most globally integrated economy in the world, Bhalla declared. Even if our economy is not the richest in the world, revenue collection is high if you look at the country’s tax system. He claimed that roughly 19% of the nation’s GDP is collected in taxes by the federal, state, and local governments.
Suggestion to lower the overall tax rate to 25%
We should work at reducing it by 2 percent, added Surjit Bhalla. Regarding direct taxes, I believe the overall tax rate shouldn’t be more than 25%. Including cess, it is currently somewhere over 40%. Our company tax rate is 25%; therefore, our income tax rate also should be 25%. Currently, the country’s top income tax rate is 39 percent.
Bhalla added that tax reductions should help everyone,
not just a tiny segment of society. Let us inform you that India’s gross direct tax collection climbed by more than 20% to Rs 19.68 lakh crore during the fiscal year 2022–23. The income taxpayers anticipated a decrease in the tax slab in the budget after an increase in tax collection. Later, the Finance Minister changed the new tax structure to provide assistance to the middle class.
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