New Delhi: As the deadline for taxpayers to file their income tax returns approaches, economist Surjit Bhalla has advocated for a decrease in the income tax rate in the country.
Bhalla emphasized that although India is not the wealthiest nation, its tax collection is considerably high.
suggesting that the current income tax rate of around 40 percent should be reduced to 25 percent.
Bhalla asserts that this reduction is crucial to spur economic growth. Currently, India’s maximum income tax rate stands at approximately 40 percent.
During a recent discussion, Bhalla stated, “India is a highly globalized economy. Despite not being the richest nation, our tax collection is remarkably high.
” He highlighted that taxes collected by state, central, and local bodies account for about 19 percent of India’s GDP.
Bhalla further advocated for a 2 percent reduction in tax collection. Regarding direct taxes, he suggested that the total tax rate should not exceed 25 percent.
as the current rate stands close to 40 percent, including surcharges. Bhalla proposed aligning the income tax rate with the corporate tax rate.
which currently stands at 25 percent. At present, India’s maximum income tax rate is 39 percent.
Addressing the issue of tax evasion, Bhalla emphasized the importance of reducing taxes for all citizens, rather than benefiting a select few.
India’s gross direct tax collection is projected to exceed Rs. 19.68 lakh crore during the fiscal year 2022-23.
with corporate tax collection estimated at Rs. 10.04 lakh crore and income tax collection at Rs. 9.60 lakh crore.
Bhalla stressed the need to reform the direct tax structure to combat tax evasion effectively, stating that high income tax rates do not effectively deter tax evasion. Instead, he proposed a tax structure that benefits the entire population.
