New Delhi, Jan 11: Middle class taxpayers may get a lot to cheer about the Budget proposals to be presented by Finance Minister Nirmala Sitharaman next month.
Sources said that the Budget 2020-21 may take the sops announced earlier under the Aatmanirbhar Bharat package to help people in their fight against the Covid-19 pandemic further, by raising the basic tax exemption limit for an individual income taxpayee to Rs 5 lakh from Rs 2.50 lakh at present to enhance net disposable income in their hands.
In the interim Budget of 2019, the government had proposed a rebate on all payable taxes if an individual’s taxable income is upto Rs 5 lakh per annum. But it kept the basic exemption levels unchanged.
Even last year, the basic exemption limit remained unchanged even though the government provided some relief to taxpayers by allowing them to choose between the existing tax regime and an alternative optional new tax regime with lower rates sans exemptions.
While the proposal to raise the basic tax exemption limit for individuals has come from different quarters, sources said that the Department of Revenue will take a call on it after examining the tax implications.
“This would also need to be assessed on basis of the potential number of taxpayers (estimated at 3.5 crore) who may fall out of mandatory tax return filing requirement. Subsequently, the other slab rates – both under the existing and new regime – can be adjusted on basis of the revised limits in line with the progressive tax rate system India has always adopted,” Parizad Sirwalla of KPMG Assurance and Consulting LLP India said. – IANS