Business Daily from THE HINDU group of publications
Sunday, Jun 28, 2009
ePaper | Mobile/PDA Version | Audio | Blogs
Business Daily from THE HINDU group of publications Sunday, Jun 28, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Industry & Economy
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Budget Reform personal income-tax 
One of the suggested methods to resolve the slowdown and increase the purchasing power of the masses is to introduce personal income-tax reforms. This would be in line with changed taxation policies, which are followed by most governments worldwide to beat recession to overcome the global financial turmoil. Some of the key personal tax reforms that the Government could consider are broad-based tax structure and enhancement of standard deductions that would go a long way to stimulate demand and will provide a much-needed boost to the economy. Every instance of enhancement of taxable limit has resulted in better compliance besides increased collections. The Finance Act, 2008, raised the individual threshold limit to Rs 1.5 lakh, and to Rs 1.8 lakh and Rs 2.25 lakh for women and senior citizens, respectively. The maximum rate of 30 per cent was made applicable over an income of Rs 5 lakh, with suitable adjustments in the income slabs in-between. While these positive initiatives have led to increased disposable income in the hands of individuals, these have not gone far enough and may need further rationalisation. Thus, the Finance Minister may consider cutting the peak personal income-tax rate by 5 per cent, which may be made applicable on an income slab of over Rs 10 lakh. Further, the basic exemption limit may be raised to Rs 2.5-3 lakh. This will boost consumer spending and revive the economy. Dr P.K. Vasudeva, Panchkula, Haryana More Stories on : Budget | Income Tax
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