Face2News/Chandigarh,
Net income tax collected from individuals has grown only 5.3 per cent this year, against 17.8 per cent for companies, although a salaried individual is taxed at a higher rate than a company.
KBS Sidhu, IAS (retd.), former Special Chief Secretary, Punjab, has pointed this out in an analysis of the Income Tax Department’s latest figures, and has made three pre-Budget suggestions for relief to the salaried middle class, which he is submitting to Union Finance Minister Nirmala Sitharaman.
KBS Sidhu complimented the Finance Minister and the Income Tax Department on the latest figures. Net direct tax collections as on 10 November 2026 stand at ₹14.42 lakh crore, up 11.76 per cent, and gross collections at ₹17.50 lakh crore, up 14.02 per cent. More than half of the year’s Budget estimate of ₹26.97 lakh crore is already in hand. “These are very encouraging figures. They speak well of the economy, and they answer those who doubt the GDP numbers,” KBS Sidhu said.
Within these figures, however, KBS Sidhu has pointed to a divergence. Corporate advance tax was up 18.09 per cent as on 17 September. The non-corporate head, which rests largely on tax deducted from salaries, has grown 5.3 per cent net of refunds. By his computation from the Department’s own statements, its gross growth slowed to about 5.5 per cent in the seven weeks to 10 November.
The rate structure runs the other way. A domestic company pays 25.17 per cent, surcharge and cess included, at every level of profit, and the Budget papers put the rate actually paid by all companies at 22.47 per cent. An individual pays 31.2 per cent above ₹24 lakh, rising to 39 per cent. A company is taxed on profit after depreciation and interest. A salary-earner gets a flat standard deduction of ₹75,000, and housing-loan interest, capped at ₹2 lakh since 2014, is not deductible for a self-occupied house in the default regime. “The company takes the lift; the salary-earner climbs the ladder,” KBS Sidhu said.
■ The three suggestions for the Budget 2027-28
* Extend the 25 per cent slab up to ₹50 lakh, so that the 30 per cent rate begins only above that level.
*Make the standard deduction a proportion of salary, say 10 per cent, subject to a ceiling of ₹2.5 lakh.
*Allow housing-loan interest in the default regime, raise the ceiling to ₹5 lakh, and index slabs and limits to prices.KBS Sidhu has urged that the Department of Revenue cost the three suggestions. He noted that the buoyancy in corporate tax and in the Securities Transaction Tax suggests room for a measured relief. He also acknowledged the relief given in the Budget of 2025 to incomes up to ₹12 lakh.
KBS Sidhu said he is formally submitting the suggestions to the Finance Minister for the Budget 2027-28, with copies to the Revenue Secretary and the Chairman, Central Board of Direct Taxes. His detailed analysis has been published in The KBS Chronicle.
Chandigarh
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