Income Tax New Rule: Finance Minister Nirmala Sitharaman will present the 2025 General Budget on February 1st next year. Meanwhile, the government has begun the budget preparation process, and the industry is also preparing for its recommendations. In this regard, the industry organization PHD Chamber of Commerce and Industry (PHDCCI) has demanded relief for ordinary taxpayers. In its recommendations submitted to Revenue Secretary Arvind Srivastava, the organization has stated that the government should consider making annual income up to ₹50 lakh tax-free.

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Tax Relief on Income Up to ₹50 Lakh

Under the new tax regime, the maximum rate of 30% should only apply to incomes above ₹50 lakh. Currently, this rate applies to those earning more than ₹24 lakh. According to the organization, the maximum tax rate should be 20% on incomes up to ₹30 lakh, and no more than 25% on incomes between ₹30 and ₹50 lakh. This would provide direct relief to middle-class taxpayers and boost consumer spending.

This percentage of tax will have to be paid

According to the organization, due to surcharges in the current tax system, the tax liability of some taxpayers reaches 39%. This means that in some cases, nearly 40% of a person’s income is used in taxes. This is a tax system that places a disproportionate burden on ordinary people.

On reducing corporate tax

It should be noted that corporate tax has also been demanded to be reduced to below 25%. The organization clearly stated that the corporate tax was previously 35%, which was reduced to 25%. Despite this, tax collection has increased significantly. In the financial year 2018-19, corporate tax collection increased from ₹6.63 lakh crore to ₹8.87 lakh crore.

Tax concessions for these companies

The organization has also recommended amendments to Section 115BAB of the Income Tax Act. Under this, the initial income tax rate for new manufacturing units should not exceed 15%. A reasonable surcharge may be levied, but the base rate should not be increased. This policy was implemented in September 2019 and extended until March 31, 2024.

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Common Man’s Expectations from the Budget

PHDCCI has clearly stated that the industry wants the government to make the tax structure simple, practical, and investment-encouraging. If income up to Rs 50 lakh is made tax-free, it will provide significant relief to the middle class.