India is thinking about lowering income tax for people who earn up to 1.5 million rupees ($17,590) in the upcoming February budget.
This move aims to ease the financial pressure on the middle class and boost spending during an economic slowdown, according to government sources.
The change could help urban taxpayers who chose the 2020 tax system, which offers lower rates but fewer tax breaks. In this system, income between 300,000 and 1.5 million rupees is taxed at 5% to 20%, while income above that is taxed at 30%. The specifics of the tax cuts are still being discussed, and a decision is expected before the budget is announced on February 1.
The finance ministry has not yet commented on the matter. While reducing tax rates might encourage more people to switch to the new system, it’s unclear how it will affect government revenue. Most income tax revenue comes from individuals earning at least 10 million rupees, who are taxed at 30%.
