Call For I-T Relief For Low-Income Earners In Upcoming Budget: CII President Sanjiv Puri

Union Budget 2024: CII President Sanjiv Puri suggested rationalising capital gains taxes, addressing operational difficulties with TDS, and reducing the multiplicity of rates

CII President Sanjiv Puri proposed the creation of an institutional platform to facilitate consensus-building between the central and state governments.

Source : PTI

Union Budget 2024: Income tax (I-T) relief for those in the lowest income bracket may be on the agenda for the upcoming 2024-25 Union Budget, according to newly-elected Confederation of Indian Industry (CII) President Sanjiv Puri, according to a report by PTI. This consideration comes in response to persistently high inflation rates.

Puri also proposed the creation of an institutional platform to facilitate consensus-building between the central and state governments. This platform aims to streamline and support reforms across various sectors, including land, labour, power, and agriculture.

Despite potential challenges posed by coalition politics, the CII is optimistic that reforms will progress under Prime Minister Narendra Modi's third term. The industry body believes the success of the economy and policies from the previous terms will provide a strong foundation for accelerating reforms.

Addressing the CII's expectations from the upcoming Budget, Puri highlighted key areas of focus: "It is public capital expenditure, adherence to the fiscal glidepath, investment in social infrastructure, a green fund, and greater investment in the rural sector," he said.

The announcement comes as wholesale inflation rose for the third consecutive month in May to 2.61 per cent, driven by increased prices of food articles, particularly vegetables, and manufactured items. This is up from 1.26 per cent in April, contrasting with a significant deflation of -3.61 per cent in May 2023.

Earlier in June, Reserve Bank of India (RBI) Governor Shaktikanta Das indicated that the RBI might consider "further policy actions" only if confident that headline inflation would remain at 4 per cent. Aligning the inflation rate with the 4 per cent target remains the central bank's core objective.

Puri noted CII's inflation estimate for the year to be around 4.5 per cent, aided by an anticipated good monsoon, which historically helps moderate food inflation.

On tax matters, Puri said the need for continued simplification. He suggested rationalising capital gains taxes, addressing operational difficulties with tax deducted at source (TDS), and reducing the multiplicity of rates. He proposed moving to a three-tier customs structure over time, with moderate rates for primary, intermediate, and finished goods, allowing for some exclusions as appropriate.

Currently, under the old income tax regime, exemptions apply to income up to Rs 2.5 lakh, while the new regime increases this to Rs 3 lakh. Puri expressed optimism that the reform process will continue to gain strength.

Looking ahead, Puri shared that CII expects food prices to moderate with a good monsoon. He also anticipates the RBI may cut key interest rates in the second half of the fiscal year, starting October. "We think that in the second half of the year, we should see some easing of interest rates," he concluded.