The Government is unlikely to moderate personal income tax rates for the rich due to fiscal stress on account of lower tax realisation amid slowdown in the economy, sources said.
Pressure is mounting on the government to cut personal income tax rates to boost demand, especially after the finance ministry reduced the corporate tax rate by up to 10 percentage points.
According to sources, personal income tax rate cut is difficult at this juncture due to multiple factors like slowdown in economy, lower tax realisation and subdued non-tax mop up. The government last fiscal missed its direct tax collection target, and for this financial year it has set a higher revenue mobilisation goal of Rs 13.80 lakh crore. The government needs higher revenue to spend on social security schemes like Ayushman Bharat, Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), PM-KISAN, and PM Awas Yojana, among others.
