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Budgeting for takeoff: The Moneycontrol Manifesto 2024-25
India’s projected 6.3-6.5 percent growth from 2023 to 2026, as estimated by the World Bank, might seem modest compared to its recent history. Yet, this positions India among the world’s fastest-growing economies and underscores its growing influence globally. India’s economic resilience can be attributed to the government’s sharp focus on capital expenditure, relying on the assumption that higher public investment in infrastructure projects will unleash significant economic benefits. This, coupled with the spending power of Indian households, is expected to play a pivotal role in steering not only India but also the global economy through the current challenging times. The crucial challenge for the government is fostering a policy environment to sustain India’s attractiveness to foreign and domestic investors. Moneycontrol, India’s leading digital platform for news, information, insights, and data on finance, markets and economy, is pleased to present the Moneycontrol Manifesto. The document aims to contribute to India’s public policy discourse ahead of the Union Budget, offering a broad matrix of fiscal, public finance and policy suggestions that our editors and experts believe warrant the attention of policymakers. INCOME TAX · The new income tax regime has been one way to lower individuals’ tax burden by paying lower tax rates. - Last year, the tax slabs and rates of the new regime were rejigged, introducing the standard deduction of Rs 50,000 for salaried taxpayers and pensioners and a tax rebate on incomes of up to Rs 7 lakh. There is a case for the basic exemption limit to be raised both in the new and old tax regimes in line with inflation. · The new tax regime is unlikely to become popular unless the old regime is made less attractive. For this, the new regime should have broader tax slabs, lower taxes, and few exemptions. · This Budget could be an opportunity to present a simpler individual income tax slab and rate construct, replacing the dual structure in place since 2020. Capital Gains Tax · Capital gains tax is levied on gains made by selling movable and immovable capital assets. The long-term or short-term capital gains tax is levied, depending on the period of holding an asset. Source - Money Control
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