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Centre seeks 9% boost from RBI, banks to offset income tax cuts: Report
The huge transfer of funds will help the government to narrow its fiscal deficit to 4.4 per cent of the GDP.
To offset a drop in income tax revenues because of the cuts announced in the Union Budget, the Central government expects the Reserve Bank of India (RBI) and public-owned financial institutions to increase their output by 9 per cent in the coming fiscal year.
According to the budget documents, tabled by Nirmala Sitharaman in the parliament on Saturday, transfers from the Reserve Bank of India and government-owned banks are estimated to increase to $29.6 billion ( ₹2.56 trillion) in the fiscal year that starts in April, reported Bloomberg.
The amount in the budget document is more than the revised estimate of 2.34 trillion rupees for the current fiscal year. The RBI board will approve the payout for this year at its meeting in May.
The huge transfer of funds will help the government to narrow its fiscal deficit to 4.4 per cent of the GDP.
The RBI pays an annual dividend to the government from the profits it earns on its foreign exchange operations and investments in the domestic and foreign markets. It keeps some for its reserves and transfers the rest to the government.
Nirmala Sitharaman's income tax announcement
Nirmala Sitharaman today announced that those with a salary of ₹12 lakh per annum will not have to pay any income tax.
"I propose to revise tax rate structures as follows: 0 to ₹4 Lakhs - nil, ₹4 Lakhs to ₹8 Lakhs - 5%, ₹8 Lakhs to ₹12 Lakhs - 10%, ₹12 Lakhs to ₹16 Lakhs - 15%, ₹16 Lakhs to ₹20 Lakhs - 20%, ₹20 Lakhs to ₹24 Lakhs - 25% and above ₹24 Lakhs - 30%. To taxpayers up to ₹12 Lakhs of normal income other than special rate income such as capital gains, a tax rebate is being provided in addition to the benefit due to slab rate reduction in such a manner that there is no tax payable by them," she said.
