Tax Practitioners Urge Government to Rationalize Personal Income Tax in Upcoming Budget

On Sunday, the All India Federation of Tax Practitioners (AIFTP) called on the government to alleviate the personal income tax burden on citizens in the forthcoming Union budget later this month.

The AIFTP president proposed raising the exemption limit to Rs 5 lakh. He emphasized the importance of simplifying the tax structure to facilitate easier compliance.

“Incomes between Rs 5 lakh and Rs 10 lakh should be taxed at 10 percent, between Rs 10 lakh and Rs 20 lakh at 20 percent, and incomes above Rs 20 lakh at 25 percent,” he stated in his memorandum to the Finance Minister.

Additionally, Jain, who is also the president of the Calcutta Citizens’ Initiative, suggested eliminating the surcharge and cess, arguing that their continuation is unjustified. He criticized the government for not adequately explaining the utilization of the education cess, underscoring that providing education and medical facilities is a fundamental government duty.

The memorandum also addresses the tax rate under section 115BBE on unexplained cash credits, loans, investments, and expenditures, which was increased to 75 percent plus cess during the demonetization period. Jain advocates for reverting this rate to the original 30 percent.