P Chidambaram had indicated that there could be a significant revamp in the taxation schemes. The direct taxes could be reduced from the existing 33.6 per cent, inclusive of surcharge to about 25 – 30 per cent. Thus, the reduction in the direct taxes would come as a sigh of relief to the several individuals as well as corporate who are affected by the direct taxes. Reducing the tax rates could also provide an incentive to taxpayers to declare their entire income honestly so that the overall tax collections can be improved.

Plus the surcharge on tax, which is paid, by individuals and association of people who have an annual income greater than Rs 10 lakh is expected to reduce. Currently, there is 10 per cent surcharge on personal and corporation income tax, which may plummet in this budget. It could come down to as low as 5 per cent. Partnership firms and domestic organisations, whose income is greater than Rs 1 crore would also benefit from this.