Union Budget 2021: Here's why Centre may leave existing tax slabs intact this year
New Delhi | Jagran Business Desk: The Central government is to likely to keep the existing tax slabs intact in the forthcoming Union Budget scheduled to be presented by Finance Minister Nirmala Sitharaman in the Parliament on February 1. Quoting tax experts, news agency ANI reported that the government, however, is expected to enhance the Income Tax deduction limit under section 80C of the IT act from the current Rs 1.5 lakhs to Rs 2.5- 3 lakhs in the forthcoming budget.
"Salaried class and middle class have great expectations regarding some tax relaxation. What I saw for the industry sector, the government has already given sufficient stimulus packages from time to time to give a booster to the industry. Expectation is that the government should increase the 80C limit from Rs 1.5 lakh to somewhere around Rs 2.5 to Rs 3 lakhs," tax expert DK Mishra told the agency.
The existing limit of Rs 1.5 lakh had been revised from Rs 1 lakh back in 2014, after being kept unchanged for over 18 years. Increasing the tax deduction limit, while keeping the tax slab intact is likely to boost the investment.
In a survey conducted by Federation of Indian Chambers of Commerce and Industry (FICCI) and Dhruva Advisors, as many as 40 per cent of the participants felt the key theme for the direct tax proposal in this year's budget should be personal tax relief.
DK Mishra told the agency there is a demand to increase the limit of health insurance premium under section 80D of the IT act.
"As an expert what I see is, that there is little scope for the government because of the fiscal deficit. The government could not achieve the target of the disinvestment. We should remember that the revenue collections are also not as per the target projection. We are far away from disinvestment target of Rs 2.1 lakh crore. It seems that the government will not be able to achieve 40 per cent of the investment target this year," he added.
Posted By: Lakshay Raja