Middle-class Indians hoping for lower personal taxes in this year's Union Budget may have to wait longer, according to NITI Aayog Vice Chairman Rajiv Kumar.
The seven-month-old Goods and Services Tax has increased the government's taxpayer base, but it's still too early to expect these gains to translate into higher revenue and lower personal tax rates, Kumar told BloombergQuint in an interview.
It does not mean that we are in a situation where we are buoyant enough to start tinkering with personal income tax rates. So we might have to wait there for a while before we come to it.Rajiv Kumar, Vice Chairman, NITI Aayog
The Economic Survey said the GST had led to a 50 percent increase in the indirect taxpayer base.
Also Read: Economic Survey: The GST ‘Feast Of Findings'
Kumar said there may be a case for making changes to the long-term capital gains tax but without “negatively impacting investor sentiments”.
Whatever is done to equalise the returns on different classes of assets must be done in a sensitive manner. Perhaps, the budget would handle it in a manner that it will not dent investor sentiments going forward.Rajiv Kumar, Vice Chairman, NITI Aayog
There is effectively no tax on equities that are held beyond one year. According to Kotak Securities, the Narendra Modi government may remove the tax break on stock investments held for more than one year or raise the holding period to claim long-term tax exemption to three years from one.
Watch the full interview here.
Also Read: Economic Survey: India's Formal Sector Payroll Substantially Larger Than Estimated
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