Income Tax exemption limit may not be changed | Fusion - WeRIndia

Income Tax exemption limit may not be changed

Income Tax exemption limit may not be changed

Several taxpayers especially the salaried class is expecting a rise in the existing income tax exemption limit.

There are huge expectations from the Finance Minister for an increase in the basic income tax exemption limit from ₹2.5 lakh.

But, some sources state that the income tax exemption limit is likely to be unchanged as the Finance Ministry has already announced a provision in the interim budget. With this, individuals earning up to ₹5lakh can get full tax rebate under Section 87A.

Yet, the basic tax exemption has not been changed from ₹2.5 lakh.

And, all those earning more than ₹2.5 lakh will have to file returns even if they have zero tax liability.

Though the middle-class people have expectations on the government regarding the tax exemption, the sources state that the increase in the basic tax exemption limit may defeat the purpose of increasing the tax base.

If the income tax limit has been increased, then it would result in a dip of tax filing as many people would not be required to file income tax returns with the increased limit.

Tax-experts suggested the Finance Minister in their pre-Budget meeting that raising the basic tax exemption limit would not prove to be a wise move due to the government’s focus on raising the taxpayers base.

Some others expect that the government would alter the existing slabs; for instance10 per cent tax rate applies to those earning up to ₹10 lakh where currently it is 20 per cent.

Salaried individuals will have some additional tax-saving measures instead of increasing the existing tax limit.

The Finance Ministry not just want to increase the taxpayer base, but seeks ways to increase revenue from taxes to improve growth and consumption. In this scenario, there are fewer chances to change the income tax rules in the budget.

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