Appreciating the reforms intent of the government to rejuvenate the Indian economy, the PHD Chamber of Commerce and Industry (PHDCCI) is looking forward to a rebound in economic growth in 2020. Inflation conditions in 2020 will be benign except a few fluctuations due to weather disruptions and the economy is expected to regain its dynamic growth trajectory, it said.
The government must focus on refueling the consumption demand with a significant reduction in the direct taxes, chamber president D K Aggarwal said in a statement.Appreciating the reforms intent of the government to rejuvenate the Indian economy, the PHD Chamber of Commerce and Industry is looking forward to a rebound in economic growth in 2020. Inflation conditions in 2020 will be benign except a few fluctuations due to weather disruptions and the economy is expected to regain its dynamic growth trajectory, it said.#
Thus reforms in direct taxation are need of the hour with remarkable rationalisation of tax rates in the forthcoming budget, he said.
The chamber suggested no personal income tax applicable up to the income of ₹5 lakhs for individuals and income tax slabs should be rationalised to 10 per cent for people earning upto ₹10 lakhs per year, 20 per cent for those with incomes of over ₹10 lakhs and up to ₹20 lakhs, 30 per cent for income over ₹20 lakhs and upto ₹2 crore and 35 per cent for individuals earning more than ₹2 crore.
The increase in the personal disposable income will propel savings and investments in the economy thereby refuelling demand in the coming times, said Aggarwal.
The chamber suggested reduction in tax on micro, small and medium enterprises (MSMEs) working in proprietorship or partnerships as a vast majority of MSMEs are either sole proprietorship or partnerships. Hence, a 5 percentage point cut in maximum tax rate of MSMEs is recommended, going forward, he said.
Further, the MSME exporters must be fully exempted from tax on their export earnings. This will enhance the exporters’ motivation and strengthen their competitiveness in the global markets, said Aggarwal.
All petroleum products should come under the ambit of goods and services tax to reduce the cascading impact of indirect taxation, he added.
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