Archive · 2 Nov 2025
Industry Body Pitches for Tax Slabs Up to Rs 50 Lakh
Imagine you earn money and have to give some to the government as tax.
A big group of businesses, called PHDCCI, thinks the government should lower the amount of tax people pay, especially those earning up to Rs 50 lakh.
They want the highest tax rate of 30% to only apply to people earning a lot more than that.
They believe that if taxes are lower, more people will pay them honestly, and the government might even get more money overall, similar to how lower taxes for companies led to more money collected.
They also suggested that people earning up to Rs 30 lakh should pay 20% tax, and those earning between Rs 30 lakh and Rs 50 lakh should pay 25% tax.
This, they say, would be a big help to everyday working families and people in the middle class.
Industry body PHDCCI has proposed reducing income tax rates for individuals earning up to Rs 50 lakh annually.
The body suggests a maximum tax rate of 20% for incomes up to Rs 30 lakh, and 25% for incomes between Rs 30 lakh and Rs 50 lakh.
PHDCCI advocates for the highest tax rate of 30% to be applied only to incomes exceeding Rs 50 lakh.
The organization argues that lowering tax rates can increase compliance and tax revenues, citing the example of corporate tax reductions.
These recommendations were submitted as part of pre-Budget proposals to the Revenue Secretary.
- Who
- Industry body PHDCCI
- What
- Recommended reducing personal income tax rates and restructuring tax slabs for individuals, partnership firms, and LLPs.
- When
- Ahead of the next Union Budget presentation in February.
- Where
- India
- Why
- To increase taxpayer compliance, boost tax revenues, and provide relief to the middle class, drawing parallels with corporate tax rate reductions that led to increased collections.
PHDCCI's Proposal
Current Tax Structure
Tax Slabs and Rates for High Earners
PHDCCI's Proposal
Proposes a 20% rate for up to Rs 30 lakh, 25% for Rs 30-50 lakh, and 30% for above Rs 50 lakh.
Current Tax Structure
Current highest rate of 30% applies to income over Rs 24 lakh, with surcharges potentially pushing the effective rate to 39%.
Rationale for Rate Reduction
PHDCCI's Proposal
Believes lower rates encourage compliance and increase tax revenues, citing corporate tax performance.
Current Tax Structure
Implicitly maintains the current structure which may be seen as adequate for revenue generation or policy objectives.
Focus of Relief
PHDCCI's Proposal
Aims to provide major relief to the middle class.
Current Tax Structure
The current structure places a higher tax burden on a specific income bracket.
- Industry Body
- PHDCCI
- Recommendation Focus
- Reducing personal income tax rates and restructuring tax slabs
- Proposed Tax Rate (Up to Rs 30 Lakh)
- 20%
- Proposed Tax Rate (Rs 30 Lakh to Rs 50 Lakh)
- 25%
- Proposed Tax Rate (Above Rs 50 Lakh)
- 30%
- Current Highest Tax Rate
- 30% (plus surcharge up to 39%) on income over Rs 24 Lakh