The change aims to lighten the financial burden on middle-income earners and leaving them with more cash in hand. The Finance Ministry have hinted that the upcoming 2024-2025 Budget will be a people one.The ministry is considering a significant move for lowering income tax rates for individuals earning between ₹15 lakh and ₹17 lakh per year.
The changes will reportedly apply specifically to the new tax regime. The government, is contemplating revisions to the tax slabs. These tax cuts are seen as a better way to increase disposable income, which would boost consumption and economic activity.
New Tax system
In the first slab of 5% starts at Rs 3 lakh, but by the time income reaches Rs 15 lakh, the tax rate jumps to 30%. So, while income increases fivefold, the tax rate increases sixfold, which is seen as too steep. Finance Minister Nirmala Sitharaman has started pre-Budget discussions. Budget for the tax paying present year 2024-25 will likely be presented in Parliament on July 18. The budget aims to position India as a USD 5-trillion economy soon and transform the nation into a ‘Developed India’ by 2047.
RBI Growth
The Modi 3.0 government inherits a strong economy with established fiscal discipline, boosted by the RBI’s highest ever dividend of Rs 2.11 lakh crore for present year 2024. The Reserve Bank of India projects is 7.2 percent of growth for the India in this tax paying year.
PM Modi Third decision
Key priorities for Prime Minister Modi’s third term include addressing agricultural challenges, sustaining capital expenditure, increasing revenue growth to maintain tax paying consolidation, and job creations. There is potential for a further rating upgrade in the next 1-2 years if the government meets its fiscal deficit targets.
