10-20-25% tax slabs: Fund manager's bold proposal to FM Sitharaman for Budget 2025

Gurmeet Chadha, Chief Investment Officer at Complete Circle Wealth, on Tuesday urged Finance Minister Nirmala Sitharaman to make Budget 2025 a defining one for generations. In a tweet addressed to the finance minister, Chadha proposed a radical simplification of income tax slabs, saying, “Above ₹10 lakh: 10%. Above ₹20 lakh: 20%. Above ₹30 lakh: 25%. If people still don’t want to pay 25%, hunt them down. Use technology. Let’s not burden honest taxpayers more.”

Chadha also proposed a 5% interest rate on home loans up to ₹50 lakh, a uniform 10% long-term capital gains (LTCG) tax across asset classes with a reduced tenure of two years, and special incentives for farmers to diversify into non-farm products. “With some lag, revenues of the government will actually go up on better compliance,” he added.  

Chadha’s appeal comes amid a conversation around tax relief for the middle class in the upcoming Union Budget. Surjit Bhalla, former IMF Executive Director, recently said that taxes in India are too high and that the government should lower the tax burden from the people. “We are overtaxing our people to an extent not known in any other country,” Bhalla said in an interview to NDTV. 

The economist said that India's tax-to-GDP ratio, including all state, local, and central taxes, currently exceeds 19%, far above the 14.5% seen in East Asian economies like China and Vietnam. “China has been growing faster than us, and East Asia has performed enormously well. Let’s just look at what kind of taxation policies they follow and have followed. And the tax-to-GDP ratio in East Asia as a whole is around 14.5%. We are 19%,” Bhalla said.

“Why are we at the level of Korea and the US? They are about 10 times richer than us. As everybody knows, as your income goes up, your tax goes up as a share. Why we are that high is something that I think the government needs to explain,” the economist said. "Corporate taxes benefit corporates, not the average citizen. We the people need a tax cut,” Bhalla said.  

Earlier this month, the Confederation of Indian Industry (CII) suggested tax cuts for incomes up to ₹20 lakh, while PHDCCI CEO Ranjeet Mehta proposed a 30% tax rate for incomes above ₹50 lakh and a 20-25% rate for incomes between ₹15 lakh and ₹50 lakh.  

Mohandas Pai, former CFO of Infosys, offered a detailed plan to revise slabs, suggesting no tax for incomes up to ₹5 lakh, 10% for ₹5-10 lakh, 20% for ₹10-20 lakh, and 30% for incomes above ₹20 lakh.  

Finance Minister Sitharaman is set to present the Budget on February 1.