India Inc now demands income tax cap at 20%

Bringing down the maximum Income Tax slab to 20 per cent, convergence to three-four GST slabs and bringing all items under it were among the demands made to Union Finance Minister Arun Jaitley, earlier this week, by industry and trade representatives.

During his pre-Budget consultations, Finance Minister Jaitley urged business leaders to invest in the infrastructure sector to build a stronger India. He said private investment, along with public and foreign investment, is the key to boost growth and create more job opportunities in India.

The Minister said the government had taken various steps, including setting up of the National Investment and Infrastructure Fund (NIIF), to boost investment in the infrastructure sector.

Industry representatives made various suggestions, including bringing down maximum income tax to 20 per cent to encourage investment, said a Finance Ministry statement. The stakeholders also highlighted the need for only threefour tax slabs under the Goods and Services Tax (GST) regime and to include in it all items excluded till now. They also demanded that the benefit of filing quarterly returns under the GST be extended to all, instead of limiting it to those with a turnover of above Rs 1.5 crore.

They urged the government to permit the purchase of Banks Recapitalisation Bonds by institutes and the public at large, reduce government stake in public sector banks, and allow banks to securitise their loans and sell the same. The government should consider further consolidation and even privatisation of some of the public banks, having at the most five to six large banks, they said. At the meeting, industry body Federation of Indian Chambers of Commerce & Industry’s (FICCI) President Pankaj R Patel pitched for board tax rate cuts for businesses and individuals to spur domestic investment and demand. Patel said the move will help in retaining India's overall competitive environment globally.

FICCI stressed that many key global economies were opting for significant rate cuts. "for instance, the US is on the verge of historic tax reform that proposes to cut the corporate tax rate from a top rate of 35 per cent to 20 per cent as well as provide relief to individuals and that this approach should also be followed by India." The FICCI chief also stressed on the need to consider the impact of the dividend distribution tax and the buyback tax.