In a significant appeal to the government, the All India Federation of Tax Practitioners (AIFTP) has urged for a reduction in the personal income tax burden on citizens in the forthcoming Union budget set to be presented later this month.
The AIFTP president emphasized the importance of increasing the income tax exemption limit to Rs 5 lakh to provide relief to taxpayers. He also highlighted the need for simplifying the tax structure to facilitate easier compliance for individuals.
In his memorandum to the Finance Minister, he proposed a revised tax rate structure: income between Rs 5 lakh to Rs 10 lakh should be taxed at 10%, between Rs 10 lakh to Rs 20 lakh at 20%, and income above Rs 20 lakh at 25%. This reformation, he believes, will create a more equitable tax system.
As the president of the Calcutta Citizens' Initiative, he also suggested the elimination of surcharge and cess, arguing that their continuation is no longer justified. He questioned the transparency of the utilization of the education cess, stressing that providing education and medical facilities is a fundamental responsibility of the government.
The memorandum also addressed concerns regarding the tax rate under section 115BBE on unexplained cash credits, loans, investments, and expenditures. During the demonetization period, this rate was increased to 75% plus cess. Jain advocates for reverting this rate to the original 30%, considering the extraordinary circumstances during demonetization have since subsided.
The AIFTP’s recommendations aim to not only reduce the tax burden on individuals but also simplify the tax compliance process, fostering a more transparent and taxpayer-friendly system.
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