The Confederation of Indian Industry (CII) has recommended that the corporate tax rate be brought down to 18 per cent in the upcoming Budget and that personal income tax rates be modified, according to the Budget demands submitted to the Ministry of Finance.
The industry body has also called for status quo on excise and customs duties.
According to the country’s premier trade lobby, the Budget 2017 should introduce a new personal income tax structure wherein income up to Rs.3 lakh a year would be exempt from income tax, between Rs.3 lakh and Rs.10 lakh would attract a tax rate of 10 per cent, income between Rs.10 lakh and Rs.20 lakh would be taxed at 20 per cent, and income above Rs.20 lakh a year would be taxed at 30 per cent.
Prevailing rate
“In the other Asian countries, the prevailing maximum tax rate in case of companies ranges from 16-25 per cent,” the CII document said.
“Also, average effective corporate tax rate across industry sectors in India is about 22-23 per cent. It is suggested that the corporate tax rate should be brought down to 18 per cent (all inclusive).”
“CII recommends continuation of 10 per cent peak rate of customs duty for the year 2017-18 to provide protection to the indigenous industry which suffers from certain disadvantages like higher rate of interest and power,” according to the document.
The industry body also recommended that the excise duty in the country be kept at 12.5 per cent until the Goods and Services Tax (GST) is implemented.
