GTRI Advocates Tax Reforms to Match Inflation and Encourage Savings

The Global Trade Research Initiative (GTRI) calls for raising the income tax exemption threshold to Rs 5.7 lakh, equalizing tax treatment for bank deposits and equities, and simplifying the TDS system. These reforms aim to protect purchasing power, encourage savings, and support economic growth in India.

The Global Trade Research Initiative (GTRI) has urged the government to revise the income tax exemption threshold to Rs 5.7 lakh to align with inflation. This adjustment would ensure the tax regime mirrors the financial climate of 2014, maintaining the purchasing power for taxpayers, GTRI highlighted on Monday.

GTRI emphasized the need for major reforms in tax deductions and exemptions, citing the significant depreciation in real value due to inflation. It suggests revisiting deductions for savings interests, life insurance, and medical insurance to reflect current economic realities.

The think tank also advocates simplifying the complicated TDS framework and aligning taxation on fixed deposits with equities to promote fairness and encourage higher household savings. Such measures aim to create a more balanced and growth-oriented fiscal environment, said GTRI Founder Ajay Srivastava.

(With inputs from agencies.)