Two types of decisions can be taken through the budget. Firstly, the government can increase the income tax exemption limit. Secondly, the government can provide relief by reducing tax on the purchase of a car or house. Economists have also advised the government to reduce tax rates on annual income up to Rs 15 lakh in view of inflation.
The government can give a big relief to the middle class in the Union Budget. According to news agency Reuters, this relief can be in the form of changes in income tax. The budget will be presented on February 1. Necessary preparations have started for this.
Finance Minister Nirmala Sitharaman has also met representatives and experts from different sectors. Reuters quoted sources as saying that two types of decisions can be taken through the budget. First, the government can increase the income tax exemption limit. In the second, the government can give relief by reducing the tax on the purchase of a car or house.
In the last budget, the government did not make any changes in the old tax system. But, under the new system, the standard deduction for salaried employees was increased from Rs 50 thousand to Rs 75 thousand. This means that at present, those with an annual income of up to seven lakhs do not have to pay any tax after the standard deduction is applied. However, in view of inflation and other economic aspects, people are demanding that the income tax exemption limit should be increased. Similarly, a decision can also be taken to give relief in other taxes.
Who will get relief?
According to Reuters, the government can reduce the tax burden on those with annual income of Rs 10-15 lakh. Currently, there are two tax slabs for people with annual income of Rs 10-15 lakh. In this, people in the slab of 10-12 lakh are taxed at 15 percent and those in the slab of 12 to 15 lakh are taxed at 20 percent. At the same time, people in the slab of more than 15 lakh are taxed at 30 percent.
Economists also gave advice
In view of inflation, economists have also advised the government to reduce tax rates on annual income up to 15 lakh. Actually, due to inflation, most of the people living in big cities pay a large part of their income in EMI of house and car. Then a lot of money is also spent on children’s school fees, ration and other essential things. They also pay tax on this in the form of GST. Considering all these factors, the government can give relief in income tax.
