Surjit Bhalla advocates reduction in income tax rate
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Bhalla said, “We are a very globalized economy in the world. If you look at the tax structure in India, the collection of taxes is very high, even though we are not the richest economy in the world. He said that the tax collection of the state, central and local bodies is about 19 per cent of India’s GDP. He further said, ‘We should move towards reducing it by two per cent. As far as direct taxes are concerned, I think the total tax rate should not exceed 25 per cent. Now it is close to 40 including surcharge. Our corporate tax rate is 25 percent, this should be our income tax rate. At present, the maximum rate of income tax in India is 39 percent.
How will tax evasion stop
Bhalla said that instead of benefiting a select section of the society, taxes needed to be reduced for all. India’s gross direct tax collection to grow by over 20 per cent to Rs 19.68 lakh crore during FY 2022-23. This includes gross corporate tax collection of Rs 10.04 lakh crore and IT collection of Rs 9.60 lakh crore. Bhalla said that there is a need to change the direct tax to reduce tax evasion. You cannot reduce tax evasion by keeping the income tax rate high, he said. We need to change the tax structure so that it benefits everyone.
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