New Delhi, Jan 10: The Central government may offer relief to tax payers to counterbalance rising inflation. Finance Minister Arun Jaitley might announce the increase in income tax exemption limit to Rs 3 lakh from Rs 2 lakh 50 thousand in Budget 2018-19, to give more money to the masses to spend and invest. Also Read - Income Tax Returns: Can You Save Tax by Gifting Money to Parents, Kids? Yes You Can | Here’s How
Sources told Hindustan that a proposal to increase the limit was made to the Finance Ministry. Last year, Arun Jaitley had not changed the limit for tax exemption. However, tax between income of Rs 2.5 lakh to 5 lakh was lowered from 10 per cent to 5 per cent. This is the last full budget before 2019 general elections; hence, it makes more political sense to increase the limit. Also Read - India Fast Moving From Tax Terrorism to Tax Transparency, Says PM Modi
The government may also bring a new tax slab for people with income between Rs 5 and 7.50 lakh annually. These people are required to pay 20 per cent tax. The government may decrease their tax from 20 to 10 per cent. Also Read - I-T Dept Exposes Rs 500 Crore Fake Bill Entry Operation Racket, Raids 42 Locations Across India
It is reported that the government may also give away sops for the elderly. People between the age of 60 and 80 may get tax exemption on income up to Rs 3.5 lakh, whereas people aged above 80 may get exemption on income up to Rs 5.50 lakh.
It was reported that the government may also increase tax break limit for people who invest in schemes which qualify under Section 80 C.
Finance Minister Arun Jaitley will present Budget 2018-19 on February 1.