Income Tax Rates –Revision required?

Income Tax Rates –Revision required?

The governments around the world may consider funding their increasing deficits by hiking personal income tax rates, though India may not be one among those, with the tax rates in the country nearly constant over the last seven years. The highest tax rate applicable on an income of over Rs 5,00,000 per annum stands at 30 per cent in India. While, this rate has remained unchanged for the last seven years in the country but several nations have witnessed a decline in these rates, said a tax survey by global financial consultancy firm KPMG. “While the trend has been a general decline in rates over the past seven years, there are preliminary indicators that a reversal may be on the way,” said the report. This year itself Ireland introduced the income levy where higher rates are charged at income levels over 250,120 Euro. Also, next year the UK budget is slated to raise the highest personal income tax rate to 50 per cent on income of over 150,000 Great Britain Pounds, said the report.
Even in the United States there are speculations that the top tax rates may be increased, it said. However, it also added that the reversal trend in income tax rates may also create other pitfalls like how much high income earners should spend on goods and services and others.
Among those countries with high tax rates are Denmark with the highest personal income tax rate at 62.3 per cent.