The Indian government has pulled out a proposal on taxing ultra-wealthy due to pressure from influential parties according to Business Times.
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The proposed tax on higher income bracket individuals, was intended to raise government revenues to ammend budgetary concerns. With the cancellation of this proposition, suggested alternatives included new tax measures for the middle class, for those who earn INR50,000.
The Business Times reported that the government aims to move away from the country’s current predominant indirect tax structure, to one with greater direct tax in the system.
The cabinet is considering an amendment in the Inland Revenue Act to incorporate tax on the ultra-wealthy.
However a government official commented that details of the proposed new tax model have not been finalised, but the plan will impose a maximum of 16% tax on income over INR35m, a drop from the previous tax rate of 24% to 35% tax on this segment.
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By GlobalData
