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Speculations about reduction in tax rates revolve around upcoming Union Budget 2008-09
(Feb 10, 2008)
Finance minister P. Chidambaram will be presenting the fifth Union Budget 2008-09 of Congress- led United Progressive Alliance (UPA) and his seventh as the Union Finance Minister in late February. This coming Union Budget 2008-09 can be the last budget of the UPA government leaded by Manmohan Singh. Keeping this view in mind, there are anticipations that government might act in a populist manner and come up with good deal of schemes with a purpose to prove the pro- aam admi credentials of Congress- led coalition government.

Union Budget 2008-09 signals at a great chance of witnessing reduction in tax rates because of greatly enhanced tax collections. However finance minister, Mr. P Chidambram, first wants to scrutinize the whole scenario by analyzing how much tax compliance has genuinely improved. As per the evidences brought forward, there has been an remarkable increase in the government direct tax collections during the recent years.

And, in this fiscal year as well direct tax collections are greater than the budgeted targets. When thrown light on the latest quaterly data, it reflects that Central government income tax receipts swell to 42 per cent in July- September 2007 in comparison to the corresponding previous year. In the same duration, Corporate tax collections was also raised by 34 per cent.