Union Budget 2020 | Income tax exemption limit likely to be raised by finance ministry: Report
New Delhi | Jagran Business Desk: The government is likely to discuss multiple options on cuts in the personal income tax in the upcoming Union Budget, reported IANS. A final decision on personal income tax cuts has already been taken by finance Ministry. The options that were considered by the FM include acting on suggestions of task force on direct tax simplification. As part of restructuring, the ministry of finance is likely raise the minimum exemption limit from the current Rs 2.5 lakh, the report said. A tweaking of tax slabs is also on the agenda.
Among measures considered by the finance ministry includes increasing tax saving measures through several options. As per reports, sources say the government is also considering tax saving options through infrastructure bonds. Under this window, tax saving may be allowed via infra bonds of up to Rs 50,000 per annum.
The panel on direct taxes code has suggested the widening of the income tax slabs. It has suggested that the 10 per cent tax slab should be extended from existing Rs 5 lakh to Rs 10 lakh, which will bring a significant relief to a large chunk of taxpayers.
If these recommendations are approved, approximately 1.47 crore taxpayers would move from the 20 per cent and 10 per cent slabs. The basic exemption level at Rs 2.5 lakh for general income taxpayers has been retained by the task force.
No changes in the income tax slabs and rates had been proposed in the previous budget. A rebate of Rs 12,500 was made available to taxpayers with income up to Rs 5 lakh. The standard deduction for FY 2019-20 was kept at Rs 50,000.
The tax slab is pegged between Rs 10-20 lakh is 20 per cent while from Rs 20 lakh to Rs 2 crore it is 30 per cent and beyond Rs 2 crore is 35 per cent.
Posted By: James Kuanal