Industry calls for tax reforms

Three industry bodies — Confederation of Indian Industry (CII), PHD Chamber of Commerce and Industry (PHDCCI), and Federation of Indian Chambers of Commerce & Industry (FICCI) suggested changes in India’s tax regime in the upcoming Budget.

During their presentation, CII asked for a “marginal relief” in income tax for taxable income up to Rs 20 lakh.

The PHDCCI said the slab of 30 per cent income tax should be raised to income of Rs 40 lakh and above. Below this, the body said, the tax rate should be kept at 20-25 per cent.

“PHDCCI have suggested to the revenue secretary to take the slab of 30 per cent beyond Rs 40 lakh income so that at least the middle class is spared from this tax bracket, and is taxed at the rate of 20-25 per cent below Rs 40 lakh,” PHDCCI told.

Currently, under the new tax regime, people with income above Rs 15 lakh are liable to pay a tax of 30 per cent. In the old regime, this was applicable for those above the income of Rs 10 lakh.

FICCI, on the other hand, did not ask for any exemptions and concessions but suggested simplification of taxation in India.

In its presentation, CII also called the current capital gains taxation structure in India “complex”. It suggested that the holding period for turning long-term for financial assets be kept at 12 months and for other assets at 36 months.

For indirect taxes, CII recommended decriminalisation of some offenses under GST and that it should be brought under a three-tax structure.

“The 12 per cent slab could be merged with the 18 per cent slab, to be around 14 or 15 per cent,” it said.

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