Union Finance Minister Nirmala Sitharaman on Monday said that she took suggestions from lawmakers to reduce personal income tax rates and it would be considered for its merit, The Times of India reported. The finance minister said she would not cut it to bring parity with the Centre’s decision to reduce corporate tax.
The finance minister’s comments about personal income tax rates came in response to a question from Trinamool Congress member Saugata Roy during a discussion on Taxation Laws (Amendment) Bill, 2019, in the Lok Sabha.
“It is very different to compare developed countries and developing countries and emerging economies and then say they have income tax reduction and therefore you should give,” Sitharaman said, adding that the Centre has periodically given several exemptions to individual taxpayers.
“Now, because we want more investments to come into this country, we have given it to all companies under the Companies Act to bring in a parity of sorts and to say personal income tax...I would rather deal with personal income tax on its own rather than because I have done this, I should do that,” Sitharaman said.
She said people who earned their living, paid their taxes and took care of businesses were valued by the government. “So, personal income tax will be considered for its merit,” Sitharaman said.
As Roy persisted with his demand for the personal tax cut, the finance minister said: “I have taken it as a suggestion”.
A government committee on direct tax had also previously recommended relief for taxpayers to put more money in the hands of the common man for a consumption-led revival of the economy. Sitharaman had earlier said the government was examining the report.
‘Centre plans to invest Rs 1 lakh crore in infrastructure’
Speaking at the India-Sweden Business Summit in New Delhi on Tuesday, Finance Minister Nirmala Sitharaman said the government was open to further reforms and has plans to invest about Rs 1 lakh crore in the infrastructure sector, reported The Indian Express. Minister for Business, Industry and Innovation of Sweden Ibrahim Baylan was present at the summit where Sitharaman invited Swedish firms to invest in infrastructure development projects in India.
“I only can invite and assure that the Government of India is committed to further reforms in various sectors whether it is banking, mining or insurance and so on,” she said. “India plans to invest about Rs 1 lakh crore in the infrastructure sector in the next five years.”
Figures released last week showed that Gross Domestic Product growth slumped to a six-year low in October even as industrial output contracted. The slump was attributed to a decline in manufacturing output and agrarian activities.
Sitharaman listed the various steps taken by the government since September to boost the economy. She highlighted that the government slashed corporate tax by almost 10 percentage points – the biggest reduction in 28 years. Indian companies will have an option to pay income tax at a rate of 22% if they do not avail of any other incentive or exemptions. New domestic manufacturing companies can pay 15% corporate tax with the same condition, if they are incorporated on or after October 1, 2019, and start production no later than March 31, 2023.