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Change in income tax slabs to boost sales of A-segment and B-segment cars

Change in income tax slabs to boost sales of A-segment and B-segment cars
Desirazu Venkat Desirazu Venkat Wednesday 01 February 2017, 18:00 PM

An announcement by the Finance Minister Arun Jaitely has benefitted the auto industry. The major news was that GST which will be implemented in September. On a side note, the announcement that the Income Tax rate has been halved to five per cent for those earing in the region of Rs 2.5 lakh to Rs 5 lakh.

The move by the government to slash the tax rate by five per cent from the current 10 will see individuals earning in this bracket having a higher amount of disposable income a.k.a more cash in hand. Given our recent growth in purchases over the last few years, this move should see a boost of sales of models in the A-segment and the B-segment. These models constitute a significant part of the car market in India and in the larger scheme of things see a growth in numbers.  

In particular, we expect to see further growth for the smaller models as many of the buyers in this part of the market will be first time car owners and are expected to go for one the smaller models on offer.  

 

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