Accordingly as the clamour grows for more money into the pockets of consumers and households to boost consumption in the economy, the government is discussing multiple options on cuts in personal income tax (PIT) in the forthcoming Union Budget. Furthermore a final decision on personal Income Tax cuts will be taken by prime minister narendra modi in the next few days. The options being considered by the Finance Ministry include acting on suggestions of task force on direct tax simplification. Accordingly a tweaking of tax slabs is on also on the agenda and as part of the restructuring the government may raise the minimum exemption limit from the current Rs 2.5 lakh.
Furthermore among the measures being considered include increasing tax saving measures through various options. Sources say the government is also considering tax saving options through infrastructure bonds. Under this window, tax saving may be allowed via infra bonds of up to Rs 50,000 a year.
Moreover the panel on direct taxes code (DTC) has suggested the widening of the income tax slabs. It has suggested that the 10% tax slab should be extended up to Rs 10 lakh, which will bring a significant relief to a large chunk of taxpayers. Perhaps between Rs 10-20 lakh, the tax slab is pegged at 20% while from Rs 20 lakh to Rs 2 crore it is 30% and beyond Rs 2 crore it is 35%.
