I wonder how the above American individual income tax-brackets compare with those of what we currently have in India on a like-to-like basis without complicating them too much with notions of Fx rate, inflation differentials and per-capita GDP.
The interesting point to note however to note from the above Infograph is the inflation adjustments being made to the limits of various tax-brackets in that tax-year.
Why can’t India do it? It works be a Great idea, I think.
The principle of it too would be vey sound as a canon of taxation.
… But then I reckon inflation is always a hot potato in Indian politics …
No one really has a clue about which inflation-index is relevant to which context and in Parliament and media all sorts of specious debates take place over it for nothing! Consumer price index? Wholesale price index? Food price index? Commodity price index?
Yes, the government pay for its employees however includes DA -/ Dearness Allowance — which we know is periodically revised to reflect and cover inflation.
Maybe that DA index could be used to adjust the limits of tax-brackets too under the IT act ?
Perhaps this suggestion is worth tossing over to FM Nirmala-ji ? In the Next year Budget , she could well introduce it as another “sixer” stroke of hers following the 2025 one she hit just three weeks ago to win the man of the match award in the Delhi elections?
Sudarshan Madabushi