Reforming the Tax Thresholds: Bridging the Inflation Gap
The Global Trade Research Initiative (GTRI) suggests revamping India’s income tax system to align with inflation. Proposals include raising the tax exemption threshold to Rs 5.7 lakh, simplifying the TDS system, and equalizing taxes on bank deposits and stock gains. Measures aim to protect purchasing power and encourage savings.
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- Country:
- India
The Global Trade Research Initiative (GTRI) has proposed significant changes to India's income tax system, urging the government to adjust the tax exemption threshold to Rs 5.7 lakh in response to inflation.
This suggestion aligns with the need to ensure that taxpayers maintain their purchasing power, which would be consistent with tax standards set in 2014. The report also highlights the gaps in the current Tax Deducted at Source (TDS) framework, calling for its simplification to enhance business efficiency without compromising revenue.
Additionally, GTRI recommends equalizing the tax treatment of bank deposits and equities to promote fairness and bolster household savings. Such reforms, according to GTRI Founder Ajay Srivastava, would create a fairer tax environment and stimulate economic growth.
(With inputs from agencies.)