CII Pitches For Marginal Tax Relief For Individuals, Higher Wages Under MNREGA In Budget

CII Pitches For Marginal Tax Relief For Individuals, Higher Wages Under MNREGA In Budget

Under the current dispensation, an individual taxpayer has the option to choose between the old tax regime, which allows various exemptions and deductions, and the new tax regime, which does not have any exemptions but offers a lower rate of taxes.

PTIUpdated: Tuesday, June 18, 2024, 08:19 PM IST
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CII Pitches For Marginal Tax Relief For Individuals, Higher Wages Under MNREGA In Budget | Pixabay

Industry chamber CII has pitched for 'marginal tax relief' for individuals having annual income of up to Rs 20 lakh, higher assistance amount under PM Kisan scheme and enhanced daily wages under MNREGA to boost consumption.

In its pre-budget representation to Revenue Secretary Sanjay Malhotra, CII President Sanjiv Puri suggested lowering excise duty on petrol and diesel, rationalising capital gains taxes and maintaining corporate taxes at current levels.

CII also suggested that the government may use a part of the Rs 2.11 lakh crore RBI dividend to boost capital spending by 25 per cent in FY25. This will help to maintain the upward trajectory of public capex and crowd-in-private capex by reinvigorating economic activities and creating demand.

To boost consumption demand, CII suggested a 'marginal relief' in income tax for taxable income up to Rs 20 lakh in the forthcoming budget to be presented in Parliament by Finance Minister Nirmala Sitharaman next month.

Under the current dispensation, an individual taxpayer has the option to choose between the old tax regime, which allows various exemptions and deductions, and the new tax regime, which does not have any exemptions but offers a lower rate of taxes.

Under the new Income Tax regime, no tax is levied for income up to Rs 3 lakh. Income between Rs 3-6 lakh is taxed at 5 per cent; Rs 6-9 lakh at 10 per cent, Rs 9-12 lakh at 15 per cent, Rs 12-15 lakh at 20 per cent and income of Rs 15 lakh and above is taxed at 30 per cent. Further, a Rs 50,000 standard deduction was allowed under the new regime.

Under the old I-T system, income up to Rs 2.5 lakh is exempt from personal income tax. Income between Rs 2.5 lakh and Rs 5 lakh attracts 5 per cent tax, while that between Rs 5 lakh and Rs 10 lakh is levied with 20 per cent tax. Income above Rs 10 lakh is taxed at 30 per cent. Besides, taxpayers can avail various exemptions and deductions on their investments and expenditures.

To put higher disposal incomes in the hands of taxpayers and boost consumption, CII also suggested that the MNREGA minimum wage could be revised to Rs 375/day from Rs 267/day in FY24, as suggested by the 'Expert Committee on Fixing National Minimum Wage'.

It also suggested increasing the direct benefit transfer amount under the PM KISAN to Rs 8,000 per year from Rs 6,000 per year.

On capital gains tax, CII said to rationalise the rates levying long-term gains tax rate at 10 per cent on financial assets and at 20 per cent (with indexation) on assets other than financial assets (like immovable property etc).

The holding period for an asset classified as long-term should be 12 months for financial assets and 36 months for non-financial assets.

CII also suggested that the short-term gains tax rate on financial assets should be 15 per cent, while for immovable properties it should be applicable rates.

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