2020 Budget: Government plans to reduce Tax rates for Individual Taxpayers

Government officials said that the government plans to reduce individual income tax rates and reduce the long-term capital gains on capital investments in its 2020 budget to stimulate economic growth.

Government's Plan

Government officials are also debating whether to provide more assistance to non-performing financial services and whether increased import tariffs boost private investment and national industrialization.

"We are planning to tailor income tax rates so that more money is put in the hands of people," a senior government official involved directly in the budget discussions told Reuters.

• Several groups are urging the government to cut personal income tax rates to stimulate demand and raise economic growth, which fell to six years low of 4.5% in the July-September quarter from 7%, a year ago.
• Earlier this year, the Modi government reduced corporate tax rates to 15% for new manufacturers and 22% for existing companies, from nearly 30%.
• Finance Minister Nirmala Sithraman is expected to present the fiscal year 2020/21 budget on February 1. She promised a budget that would do more to boost growth.

Another government official said a proposal was being considered to ease long-term capital gains in equity investments to attract investors.

"There are many proposals, including the complete abolition," the official said, adding that the issue was discussed at the Prime Minister's Office. He said that the final decision has not yet been taken.