New Delhi: In a bid to provide relief to the middle and salaried class, the Narendra Modi-led government is mulling to revamp income tax slabs in the upcoming Union Budget 2020, which is likely to be presented on February 1 by Union Finance Minister Nirmala Sitharaman. Also Read - Centre Lifts Embargo on Grant of Govt Businesses to Private Banks
Speculations are rife that those having annual income between Rs 6-7 lakh may be taxed at the rate of 5 per cent. Also Read - 'Damads' Get Land in States Which Are Governed by Some Parties: FM Sitharaman Makes Veiled Attack at Congress in Lok Sabha | Key Points
At present while individual income upto Rs 2.5 lakh per annum is exempt from tax, a 5 per cent tax is levied for income between Rs 2.5 lakh and Rs 5 lakh. A higher 20 per cent slab is for income between Rs 5 lakh and 10 lakh while a 30 per tax rate is applicable for income above Rs 10 lakh. In addition, the government also levies a surcharge in slabs on super rich for income above Rs 50 lakh. Also Read - Budget 2021 Reflects Atmanirbhar Bharat, Not Opposition's False Narrative: Sitharaman in Rajya Sabha
In the interim Budget in February 2019, there was some relief given to taxpayers but it primarily benefited only those whose income was below Rs 5 lakh. It was announced that there will be no tax liability if the net taxable income does not exceed Rs 5 lakh.
Tax experts who did not want to be named on the issue told IANS that the government could look at a flat rate somewhere in between the 5 and 30 per cent income tax rates. The ideal would be around 15-18 per cent rate that would be lower than the peak rate of 30 per cent and the second rate of 20 per cent.
Also, the new lower flat rate of tax may be applicable only for annual income of upto Rs 50 lakh. Sources said that a higher flat rate is also being looked at for the super rich but discussions on this have remained inconclusive.
(With agency inputs)