There is a limited scope for personal income tax cuts in the upcoming Budget, a government official told CNBC-TV18.
The official also said that non-tax revenue generation will be a core focus area in FY21, and that asset monetisation and divestment will be pushed in the next fiscal year. He also said that the government's holding in several listed Public Sector Undertakings will be reduced significantly in FY21.
The official also stated that a proposal to relax rules around taxing Long-term Capital Gains (LTCG) and Dividend Distribution Tax (DDT) will be part of measures to spur capital creation.
Experts feel that personal income tax cuts can put additional money in the hands of the middle and lower middle classes that will drive up consumption and investment spending.
Others have strongly argued against personal tax cuts on the grounds that income tax cut would benefit only on a small percentage of the population, which may not be the best option to stimulate growth. They feel that the government should use the money it has to invest and stimulate demand.