After the reduction in Corporate Tax by 10% there has been a constant pressure on the government to reduce personal income tax; but it is very unlikely to happen due to the slowdown in the economy and the increasing burden of fiscal stress.
Crux of the Matter
Government has made income of up to Rs 5 lakh exempt from tax. due to which the government in the last fiscal missed its direct tax collection target.
It aims to have a higher revenue this year with a target of Rs 13.80 lakh crore.
The government plans on increasing spending social security and reducing tax burden on lower income earners.
In the Budget 2019-20 government enhanced the rate of surcharge on individuals with taxable income of more than ₹2 crore with new to 42.74% from 39%.
The government needs higher revenue to spend on social security schemes like Ayushman Bharat, MNREGA, PM Awas Yojana and many more.
Curiopedia
Income Tax in India – Central Government can levy a tax on any income other than agricultural income, which is defined in Section 10(1) of the Income Tax Act, 1961. The government imposes a tax on taxable income of all persons who are individuals, Hindu Undivided Families (HUF’s), companies, firms, LLP, association of persons, body of individuals, local authority and any other artificial juridical person. Levy of tax on a person depends upon his residential status. The CBDT administers the Income Tax Department, which is a part of the Department of Revenue under the Ministry of Finance, Govt. of India. Income tax is a key source of funds that the government uses to fund its activities and serve the public. More Info
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