Union Budget 2021: How personal income tax regime went through complete overhaul in last 7 years
New Delhi | Jagran Business Desk: With the economy showing signs of recovery from the effects of COVID-19 pandemic, Finance Minister Nirmala Sitharaman will present Union Budget 2021 on Monday. While the government might announce special schemes to revive the pandemic-hit economy, experts believe that it will unlikely provide income tax reliefs in the upcoming Budget.
In 2020, the Centre had introduced new tax slabs, providing massive relief salaried and middle class. Experts, however, feel that the government might not provide income tax reliefs in Union Budget 2021 because of the fiscal deficit.
Since Prime Minister Narendra Modi came to power, the government has brought several changes in tax slabs, providing major relief to the countrymen. So as Sitharaman presents Union Budget 2021, here's how tax changes were brought by the central government since 2014:
In 2020, the Centre had revised income tax slabs and tax rates, providing relief to the citizens. Under the new structure, the Ministry of Finance had said that people earing below Rs 5 lakh will pay no tax while those earning Rs 5 to 7.5 lakh will have to pay 10 per cent taxes.
The Centre had proposed to impose a TDS at the rate of 2 per cent for withdrawal of cash more than Rs 1 crore per year. It also said that firms with an annual turnover of over Rs 400 crore under the tax bracket of 25 per cent.
The Ministry of Finance had hiked the cess to 4 per cent in Union Budget 2018. It had also raised the exemption of interest income on bank or post office deposits to Rs 50,000 while deduction limit for health insurance premium under section 80D of Income Tax Act was increased to Rs 50,000.
In 2017, the central government had reduced income tax rate on income of Rs 2.5 lakh to 5 lakh to 5 per cent. The Centre had also reduced rebate under Section 87A to Rs 2,500 while the deduction on investment in Rajiv Gandhi Equity Saving Scheme was abolished.
The Ministry of Finance had increased the surcharge to 15 per cent for a total income of more than Rs 1 crore. It had also increased the tax rebate for individuals to Rs 5,000 for those with income up to Rs 5 lakh.
In 2015, the Centre had increased the surcharge on income over Rs 1 crore to 12 per cent and abolished wealth tax.
The Ministry of Finance in 2014 had increased the income tax exemption limit by Rs 50,000 to Rs 2.5 lakh while the deduction limit on interest on loan was raised to Rs 2 lakh.
Posted By: Aalok Sensharma