Salaried class may get big I-T relief

Salaried class may get big I-T relief

Salaried class may get big I-T relief

Finance Minister Arun Jaitley may exempt personal income up to Rs 4 lakh from being taxed when he presents the Union Budget on February 1.

In a marked deviation from the past, he may also revise the existing slabs upward and make them four this time. A new slab of incomes between Rs 4 to Rs 10 lakh is likely to be introduced and this may be taxed at 10%.

A source told DH the government wants to widen the tax base and increase compliance through an overhaul of tax rates.

Those who fall in the bracket of Rs 10 and Rs 15 lakh may be taxed at 15%. In the third slab of individual incomes between Rs 15 to Rs 20 lakh the tax rate is expected to be 20%. A flat rate of 30% is expected to be announced for incomes above Rs 20 lakh.

“There is a need to widen the tax base and improve compliance. The rate overhaul is required to curb black money as well,” said a senior official.

The Budget is also expected to spell good times for the poor, small and marginal farmers.

The Budget is also likely to focus on employment generation. According to official figures, employment generation during the July-September period was at its lowest since 2009.

Prime Minister Narendra Modi has already given a glimpse of this year’s Budget in his year-end address to the nation. Modi had announced waiving off interest of over Rs 660 crore on short-term crop loans. He had also announced measures for small and medium businesses and traders.

Another source said the Budget could pronounce more measures for agriculture and the rural sector to boost consumption demand. There has been a sharp decline in consumer demand due to cash crunch post demonetisation.

Economists, including India’s first chief statistician Pronab Sen, are of the view that the Budget will announce measures to push consumption along with the usual steps to accelerate investment cycle.