The party wants to make the first £12,500 of earnings exempt from income tax but if the SNP is in power in an independent Scotland, the income tax threshold would rise from inflation, according to Scottish LibDem president Sir Malcolm Bruce.
The amount people can earn before they pay income tax has been increased from £6745 by the Tory-LibDem coalition, and is due to rise to £10,000 in 2014-15.
The Scottish Government's White Paper on independence says tax would rise in line with inflation. Sir Malcolm said this would mean people paying £450 a year more in tax than under LibDem plans to raise the threshold to £12,500.
By April 2 next year, 170,000 people in Scotland would be £700 a year better off as a result of increases to the income tax threshold, the MP for Gordon said.
"Scottish LibDems in government have given more than two million Scots a £700 tax cut," he said.
"We want to go further and take people on the minimum wage out of income tax altogether, building a stronger economy and fairer society."
A spokeswoman for the Scottish Government said: "By 2013-14 the tax rises imposed by the UK Government since 2010 will be worth £25 billion, around £400 per person in the UK. When you then add cuts to public spending, this rises to £90bn: around £1400 per person and by 2015-16 this will be around £130bn," she said.