Budget 2017 is likely to make a recast of direct taxes focusing on both corporate tax and personal income tax to give a boost to the economy that’s struggling in the wake of demonetisation.
The recast is likely to speed up progress to a corporate tax rate of 25%, already a stated objective of the government, and offer substantial reliefs for small taxpayers who have backed demonetisation.
“With the goods and services tax (GST) India Budget News to come from next financial year, there isn’t much to be done on the indirect taxes side. The customs duty structure could see some changes,” a senior government official said.
Dividends above a threshold can be clubbed with the income of the assessee and taxed at the marginal rate, now 30% in the top bracket. A bigger cut in corporate tax is likely as Jaitley promised it last year and small progress was made when companies with less than Rs 5 crore turnover were levied tax at 29%.
Income tax payers will be the biggest gainers as tax slabs might be extended, with more people falling into the lower brackets. The tax rate may not change, reported The Economic Times.