Survey shows nearly 50% wants Income Tax rate to be slashed

The Union Budget 2017 will be presented by Finance Minister Arun Jaitley on 1 February 2017. In the last few weeks, several industry lobbies have been pushing to get their agenda included in the budget.

In this cacophony of lobbies the voice of the common citizen, the honest tax payer, is lost. LocalCircles a citizen engagement platform has been working with its more than 1.2 million users to prepare a list of important things that citizens want to see in the budget.

 Survey shows nearly 50% wants Income Tax rate to be slashed


In the recent past, common citizens have borne the brunt of demonetisation. Most have supported its stated objective - to reduce black money, counterfeits and terror financing. However, they have lamented its poor implementation. They expect the government to do something in lieu of the pain they suffered on account of the cash crunch in the last two months.

Therefore, when asked the question that what should government do post-demonetisation to give a boost to the economy about 49 percent of the 9,401 citizens polled wanted the income tax to be reduced, so that their disposable income could rise. This disposable income will lead to higher spending and boost the economy that has slowed in the last two months.

Due to demonetisation cash transactions have dried up and the government has pushed citizens to transact digitally. Digital transactions are being done through credit card, debit card, digital wallets, internet banking and the Unified Payment Interface of NPCI. All these methods have buried transactions costs which the customer or the merchant is bearing. The cash situation has not yet normalised so digital transactions are still growing.

Moreover, over the long term digital transactions are more useful as they make the last mile consumption transparent for tax purposes. This is why they need to be incentivised instead of being loaded with costs. About 33 percent of the respondents polled want the taxes on digital transactions to be dropped. This is something that can be done in GST environment and both the state governments and central governments have to agree to this in the GST council.

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Updated Date: Jan 13, 2017 20:28:28 IST