Mumbai: The government could cut personal income tax rates in the Union Budget on February 1in order to revive growth, said foreign brokerage CLSA The brokerage said any income tax cut would be seen as a boost for discretionary companies. “To spur consumption, we see a good chance the government may consider some reduction of the personal income tax rate. We estimate this could pull down income tax collections by 20% or Rs 1 tn ( trillion or lakh cr). Any roll-back of long-term capital gains tax, ending of the dividend distribution tax and relief for the buyback tax would be positive for the market, added CLSA. Property developers, housing finance, cement and home improvement-focused companies may benefit if the government announces an exemption limit for interest on housing loans, said CLSA.Hindustan Unilever, Colgate-Palmolive India and Dabur may gain if the government chooses higher rural spending over a tax cut, it said.

Source: Economic Times January 24, 2020 22:41 UTC