New Delhi, Jan 31: Whenever any government is set to present its annual budget for the country, the first thing that comes to the mind of taxpayers, especially the salaried class and business community, is about income tax.
Will income tax rates and slabs be reduced by the government to give relief to the honest taxpayers? Or will the government of the day turn harsher to ask for more income tax from taxpayers?
These questions haunt every common man in India during the budget season. As Union finance minister Arun Jaitley is all set to present the much-awaited Union Budget 2018 on Thursday (February 1), taxpayers are concerned about the new income tax slabs and rates.
The concern among the taxpayers regarding income tax rates and slabs is pretty obvious as these factors would determine the amount an individual will have to pay as taxes on their income in the fiscal year 2018-19.
The upcoming budget will be the last full budget of the Narendra Modi government. The budget in 2019 will only be a vote-on-account. The voters are expecting various largesses and reliefs from the kitty of the finance minister.
According to a survey done by the tax and advisory firm EY, in the upcoming budget, the Modi government may tweak income tax slabs and rates to bring down the burden on individuals.
During the survey majority of the respondents--69 per cent--felt that the threshold limits for taxation could increase to boost disposable income in the hands of the people.
The tax slabs in the last budget were left unchanged. However, the finance minister gave some relief to the small taxpayers by reducing rate from 10 per cent to 5 per cent for individuals whose annual income is between Rs 2.5 lakh-Rs 5 lakh.
In the EY survey, about 59 per cent of the respondents were of the view that multiple outdated deductions would be replaced with a standard deduction in order to reduce the tax burden of employees.
The survey includes the views of 150 CFOs, tax heads, and senior finance professionals and was conducted in January.
About 48 per cent of the respondents said they expect the finance minister to lower corporate tax rate to 25 per cent but the surcharge would continue.
Most of the respondents (65 per cent) do not anticipate a change in the current taxation of dividends at this stage. About 24 per cent of the respondents feel that with a view to lowering the overall burden on the corporate sector, the government may lower the rate to 10 per cent.
"The pre-Budget 2018 EY Survey with business decision makers reveals a consensus amongst India Inc for stability and consistency in tax policies and a moderate tax structure. There seems to be little expectation of any major direct tax overhaul after the transformative introduction of GST earlier in the year," EY India National Tax Leader Sudhir Kapadia said.
Now, the question is--has Jaitley taken into consideration popular sentiments before deciding on the income tax rates and slabs in the budget for the fiscal year 2018-19? Well, we will know about it in a few hours from now on Thursday.