PM's office finalising I-T goodies

Ministry readies 3 slabs

PM's office finalising I-T goodies

 The government is preparing to sweeten the upcoming Budget by exempting more income from tax.

The exemptions are being decided by the Prime Minister's Office, sources told DH.
The coffers are enjoying a bounty in tax revenue, despite demonetisation slowing down the economy.

The finance ministry has sent three proposals to the PMO, detailing the implications of raising the income tax exemption limit to Rs 3.5 lakh, Rs 4.5 lakh and Rs 5 lakh, sources said.

At present, incomes of up to Rs 2.5 lakh a year are exempted from any tax. The threshold for senior citizens is Rs 3 lakh. For those above 80, it is Rs 5 lakh.

Officials described this as a sensitive year, since citizens have suffered hardship in the wake of demonetisation. The government is treading cautiously on the tax exemption question.

“The Prime Minister’s Office wants to thoroughly analyse each proposal,” an official said.

Finance Minister Arun Jaitley had on Monday said direct tax collections in nine months (April-December) of the current fiscal were 12.01% higher than the collections for last year. Indirect tax collections are higher by 24%.

Factoring in the robust revenues as also the inflation, tax consultant Deloitte has suggested to the government doubling of the exemption to Rs 5 lakh.

“It will place more money in the hands of consumers resulting in demand pick-up. Also, the increase in the slab limit will kick-start savings, which will ultimately lead to increase in investment in the system,” its Pre-budget Expectations Survey Report said.

Sources said the government might also cut corporate income tax rates by up to 1.5%.

Cheering news

The PMO is looking at the implications of exempting tax on annual incomes of up to Rs 3.5 lakh, Rs 4.5 lakh and Rs 5 lakh.

Incomes of up to Rs 2.5 lakh a year are now exempted from tax.

Tax consultant Deloitte has suggested to the government doubling of the exemption to Rs 5 lakh

The government may also cut corporate income tax rates by up to 1.5%




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