India tax: Budget 2024: Give the middle-class tax benefits & cut fuel excise, India Inc tells Finance Ministry

India tax: Budget 2024: Give the middle-class tax benefits & cut fuel excise, India Inc tells Finance Ministry

India’s industry lobby groups have asked officials of the Finance Ministry consider personal tax benefits for the country’s middle-class and a simplification in direct tax regime in the upcoming Union Budget announcement.

In a meeting with Revenue Secretary Sanjay Malhotra, CII President Sanjiv Puri advocated for marginal tax relief for incomes up to Rs 20 lakh and called for reduced excise duty on petrol and diesel. He noted that while Brent crude prices have dropped by 40 per cent, pump prices in Delhi have only fallen by Rs 1.8 per litre.

Certain sectors in India have been impacted due to skewed consumer spending, as highlighted in the country’s latest GDP readings. This gulf between India’s enviable GDP growth rate figures and the slowing consumer demand seem to be a spot of bother for certain businesses. Sops aimed at reducing tax burden are likely to have a positive impact on consumer spending in the country.

ALSO READ: Fin Min considering income tax rate cuts to boost consumption

Consumer companies are optimistic about FY25 prospects owing to the IMD’s forecast of plentiful monsoon.

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Puri also proposed increasing the annual PM-KISAN payout from Rs 6,000 to Rs 8,000 and raising minimum wages under the government’s labour scheme MGNREGA. He argued that these measures would boost disposable income and stimulate consumer spending. “The middle class is currently taxed at a rate of 30%, leaving them with little disposable income for savings and other needs. We suggested that the 30% tax slab should apply only to incomes above Rs 40 lakh,” news agency ANI quoted Mukul Bagla, chair of the direct taxes committee at PHDCCI as saying. FICCI has proposed simplifying the capital gains tax system by streamlining it into two or three broad categories based on asset types, holding periods for long-term status, and eligibility for indexation benefits. They suggest categorizing assets into three groups: equity instruments, debt, and other assets, with specific rates set for both long-term and short-term gains. FICCI also recommends uniform tax rates for residents and non-residents, eliminating the current distinctions.

“Our suggestions have focused on maintaining the growth momentum, while seeking simplification for ease of doing business and reducing litigation. Where litigation has started, the idea should be to find a workable solution for everyone,” said Subhrakant Panda, the chamber’s immediate past president.

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