New Delhi: Income tax rate as well as interest rate are expected to come down as a result of demonetisation of high value currency notes, government said today.
“I cannot reveal everything which will be part of the budget, but interest rate will come down…it will definitely come down”, Minister of State for Finance Arjun Ram Meghwal said.
He also indicated there is a possibility of income tax rate cut in the upcoming budget which is expected on February 1.
“There are two issues with income tax– exemption limit, and another is slab. Both of them will be looked into,” he said while addressing an event organised by Laghu Udyog Bharti here.
Assuring relief to the MSME sector, Meghwal said the next budget will look into their concerns.
Spelling out advantages of demonetisation, Meghwal said that it will help lower interest rate.
Besides, it is choking the funding to terrorist organisation and flushing out black money from the system.
Naxal activities have come down significantly across the country, he added.
On the issue of major amount of old Rs 500/1000 currency have come back into the system, he said, it can be said with clarity only after reconciling data.
Banks are yet to segregate fake currencies from the deposits that they have got and there are issues of double counting of deposits of banks and post offices.
These issues would be cleared after reconciliation takes place, he added.
With regard to the Goods and Services Tax (GST), Meghwal said the government intends to implement it from April 1.
“The Constitution does not permit delay in GST implementation. The government notified GST on September 16 and the constitutional amendment itself says the current indirect tax system can continue for one year, after which the GST has to come,” he said.
If it is not implemented by September 16 next year, both states and centre would lose their power to levy tax, he said.
“GST will be the first act in which it will be one country, one tax which will include Jammu and Kashmir also. J&K will also have to implement GST,” he said.