New Delhi: Income Taxpayers may be in for a surprise in 2025 since the Centre is reportedly mulling over a proposal for tax cuts in a move which is expected to benefit individuals who earn up to Rs 15 lakh per annum in the upcoming Union Budget. Prime Minister Narendra Modi has been urged by econoimists to consider tax cuts in bid to ease the common citizen’s tax burden.
PM Modi brainstormed with economists and NITI Aayog experts on Tuesday, Reuters reported.
Will Modi govt slash Income Tax?
Economists suggested tax cuts, and rationalisation of tariffs and customs duties in a bid to boost India’s exports in the upcoming Budget, Reuters reported, citing people with knowledge of the matter. Finance minister Nirmala Sitharaman will deliver the Budget Speech on February 1, 2025, in the Lok Sabha.
The tax rate cut suggestions have come against the backdrop of a slowdown in India’s GDP growth to 6.7 per cent in Q1 and 5.4 per cent in Q2 FY25. While the Asian Development Bank revised India’s GDP growth forecast downwards to 6.5 per cent from 7 per cent earlier, the Reserve Bank of India has slashed the GDP growth forecast to 6.6 per cent from 7.2 per cent earlier.
A tax rate cut is expected to leave more money in consumers’ hands thus leading to a surge in consumption related demand which may in turn drive economic growth.
Income Tax review panel
FM Sitharaman had announced that the government was contemplating comprehensive Income Tax reforms for which a panel was constituted under the Chief Commissioner of Income Tax V K Gupta. The panel is expected to submit its report ahead of Budget 2025-26, Moneycontrol reported.
Income Tax changes are unlikely in the near term sincev systems will take time to adapt to new rules, the report stated, citing a senior government official. The committee is expected to propose legislative changes instead of tax rate changes, according to the report.
The Centre is likely to be contemplating Income Tax rate cuts in Budget 2025, Reuters reported, citing people with knowledge of the matter. The move is expected to leave more money in the hands of taxpayers and likely to boost India’s GDP growth. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
