REFORM TAX LAWS IN BUDGET TO REDUCE COST OF COMPLIANCE

THE Union Budget is just round the corner and expectations are peaking over cuts in the personal income tax rates. While presenting her seventh budget last July, Finance Minister Nirmala Sitharaman had offered limited tax relief, which failed to improve individuals' purchasing power.

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The decline in wages and persistent rise in prices have tightened household budgets, which is reflected in private consumption steadily going south. If consumption grew at a mere 7.45 percent in the first quarter of 2024-25, the growth further slowed to 5.96 percent in the second quarter. So the upcoming budget needs to focus on boosting consumption and one simple way is through tax cuts. Sitharaman had announced an overhaul of income tax laws last July; reports suggest the government may introduce a bill for it in the forthcoming parliamentary session. While such a legislative change takes its own time,