The government has virtually ruled out a reduction in personal income tax, including in the forthcoming Budget, with well- placed sources citing examples of higher rates in several countries such as China, the US and the UK, apart from the lack of fiscal space to reduce the levy.
The government’s decision to slash corporation tax rate to 15% for new companies in September had set off speculation about a reduction in personal income tax (PIT), which was raised to over 42% for high net worth individuals (HNIs) in the last Budget. What has added to the demand is the recommendation of a committee on income tax, which had advocated a reduction in rates.