Government should come up with something new for personal income tax regime: Revenue Secretary Tarun Bajaj
Deepak Gupta | Nov 30, 2022 |
Government should come up with something new for personal income tax regime: Revenue Secretary Tarun Bajaj
Revenue Secretary Tarun Bajaj on Tuesday said that “the personal income tax regime needs a complete reinvent and government should come up with something new and only one regime rather than having two regimes.”
“The aim should not be to increase the tax rates, even if it is revenue neutral or even if it gives up some revenue if it makes it simple. If there are less exemptions or exemptions are simple, and if you make more money than me, you pay more taxes. If I make less money than you I pay less taxes and not vice versa, which is the situation right now,” he said. He Further added that some people who take benefit of a lot of exemptions today will be the losers.
Although the official said that his view was independent of the preparations underway for Budget FY 2024, he iterated that there was also a pressing need to align Mr Bajaj then said in personal income tax, minimal exemptions should be given and the tax brackets should be expanded.
“For instance, the tax bracket (for 20 percent tax) can be from Rs 5 lakh-15 lakh instead of Rs 5 lakh-10 lakh. This can be a revenue-neutral exercise and the regime will be simpler,” The Secretary was quoted as saying by a Financial Express report.
“That is what we have done in the corporate tax, where it has been brought down to 22 percent without exemptions and now about 70 percent of the total income of the corporate sector has moved into this though the number of players is much less, they are about close to 20 percent. But 70 percent of the income has moved there. As we move from year on year, the 70 percent figure will start touching 100, it will go to 200 and the same thing would happen for the personal income tax,” Bajaj added.
He also said while certain exemptions such as insurance premium for senior citizens would still be needed, most such concessions could go.
“Small savings give better interest rates and tax exemption also,” he said.
The Revenue Secretary also spoke about India’s capital gains tax regime, which he said is complicated and needs simplification.
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