New Delhi, Feb 2 Only India and Bangladesh have income tax limits that are much higher than the average income.
This implies that there is indeed food for thought for lowering direct taxes but ensuring such a system is equitable and not regressive, SBI said in a Post-Budget research.
There is always a lot of hullaballoo regarding the income tax structure in India. It is true that in some countries, including India, the top marginal personal income tax rate exceeds the corporate income tax by a significant margin, providing strong incentives for taxpayers to choose the corporate form of doing business for purely tax reasons.
Good tax policy should ensure that the top marginal personal income tax rate does not differ materially from the corporate income tax rate, SBI said.
However, on the other hand, India's per capita GDP in FY21 stands at Rs 1.46 lakh, while the taxable income threshold is Rs 2.5 lakh. Which then means the average Indian is not required to pay an income tax. In many countries around the world, that income tax limit is below the average income of its people.
Only India and Bangladesh have income tax limits that are much higher than the average income.
SBI said if growth comes back riding on the spending prowess, the nominal GDP projection may be an underestimate. This may thus provide even some more additional spending room for the Government. Consider this.
The story of increase in household debt during pandemic turned on its head right now with the release of NSO data on January 31, 2022. While the total gross financial savings jumped by a massive Rs 7.1 lakh crore in FY21
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