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Income Tax slab of 30% be apply on or above Income of Rs. 12 Lakhs suggest by FICCI

Income Tax Department be apply 30% Tax Slab on or above Income of Rs. 12 Lakhs has suggested by Federation of India Chamber of Commerce Institute as to raise the Income Tax Limit. Now a days, Indian Economy would have been suffering from the global recession which slows down the economic growth to 6.9% which is lowest in the nine quarters.

In the forthcoming budget of this year 2012-13 the FICCI has suggested to Indian Government Department of Income Tax that the highest peak rate of 30% to be imposed to the tax payers whose income are 12 lakhs and above which is currently on the 8 lakhs. FICCI also suggested that the peak rate should be set on the income of 25 lakhs and above which only boost the purchasing power of the common man and helps the economy to grow at decent rate.

Indian Government is launching the DTC (Direct tax code) bill in this coming budget and it’s really hard to set the peak tax slab on 12 lakhs income as there is no provision in DTC bill. In DTC bill there is a provision of setting income tax slab to -
Upto 2 Lakhs - NIL
2 to 5 Lakhs - 10%
5 to 10 Lakhs - 20%
Above 10 lakhs - 30%

The current year income tax slabs (click here)

Reason:
Due to global recession now days, there are less source of income or the business is not tends to grow. So if the assessee continues to pay higher tax on their income, there is less disposable income left in their hands.

Disposable Income:
Disposable income is the income which left on the assessee hands after deducting the tax.

If the people have more disposable income in their hands, either they spent it on purchasing or they invest it anywhere. In both the condition the economy gets liquidity and the money which is the crucial factor for the economy growth rate. If more money comes in the market, the Indian market will surely grow at the higher rate which results to more chances of employment and big industries.

So the FICCI suggested the Indian government to fix the peak tax slab on the income of above 12 lakhs for the financial year 2012-13.

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