Union Budget 2021 | To encourage spending, govt likely to give relief up to Rs 80,000 in total tax liability: Report
New Delhi | Jagran Business Desk: The Union Budget 2021 will be presented by Finance Minister Nirmala Sitharaman on February 1 amid high hopes from almost every sector and industry. The Union Budget 2021 also holds greater importance as it will be the first after the coronavirus pandemic wrecked havoc across the country and caused huge losses to different businesses and industries. Apart from businesses and industries, the common man also faced the wrath of the pandemic as it caused financial unrest in many households.
Now in order to put more money in the hands of the taxpayers of the country, the government is expected to provide tax relief of up to Rs 80,000 per annum in total tax liability, which can be a big relief for the taxpayers. According to a report by CNBC-TV18, the finance ministry is mulling to provide a relief of Rs 50,000 to Rs 80,000 in the total tax liability.
The report further stated that the government is expected to change the tax slabs for the new tax regime announced in last year's Budget. The new tax slabs will depend on the choice of the taxpayers as if one chooses a new tax regime, it will be applicable at lower rates, but the person has to forgo certain permissible exemptions and deductions available under old income tax regime.
However, the tax experts noted that the new regime is not creating much enthusiasm among the taxpayers. In order to woo the taxpayers, the government may introduce certain measures in the new tax regime which will give more headroom to the taxpayers to save more taxes.
According to the existing tax slabs, there is no tax is for an income of up to 2.5 lakh, between 2.5 lakh to 5 Lakh there is 5 per cent tax, for 5 to 7.5 lakh it is 10 per cent, for 7.5 to 10 lakh it is 15 per cent, for 10 lakh to 12.5 lakh it is 20 per cent, for 12.5 to 15 lakh it is 25 per cent and for 15 lakh and above 30 per cent tax is applicable for individual taxpayers up to 60 years of age.
The report further stated that the government may increase standard deduction under the old income tax regime. The standard deduction is an amount that is deducted from an individual’s salaried taxable income, thus reducing the taxable income.
Meanwhile, a report by Livemint, quoting the Federation of Indian Chambers of Commerce and Industry (FICCI) stated that the standard deduction for salaried employees should be increased to Rs 1 lakh. FICCI further said that the government should also consider a raise in the limit and cited expenses incurred by employees in setting up home offices.
Posted By: Talibuddin Khan