Income Tax Slab Rate: Finance Minister Nirmala Sitharaman will present the seventh consecutive budget in the third week of July. This is the first budget of the third term of the NDA Government led by Prime Minister Narendra Modi.
After the BJP did not get a majority in the Lok Sabha elections, it is speculated whether the Finance Minister gives tax relief to the taxpayers in her budget. However, the industry representatives who attended the pre-budget meeting with the Finance Ministry officials have demanded relief for taxpayers who fall under the 30 percent income tax rate slab.
Relief To Those Falling In 30% Tax Slab!
In the pre-budget meeting of Revenue Secretary Sanjay Malhotra and Business Chamber CII President Sanjeev Puri, relief in the tax rate was demanded for those with annual income up to Rs 20 lakh. This is the same category that comes in the 30 per cent slab. Under the old income tax regime, those earning more than Rs 10 lakh annually have to pay 30 per cent income tax, while in the new income tax regime, those earning more than Rs 15 lakh have to pay 30 per cent income tax.
Mukul Bagla, chairman of the Direct Tax Committee of PHD Chamber (PHDCCI), has suggested to the Revenue Secretary that those earning more than Rs 40 lakh should be brought under the 30 percent tax rate slab so that the middle class can be relieved from the burden of this tax rate. He has also demanded that those earning less than Rs 40 lakh be brought under the 20 to 25 percent tax slab.
No Change In The Limit Of Rs 10 Lakh After 2012-13
Under the old tax regime, those earning more than Rs 10 lakh were included in the 30 percent tax slab from 2012-13. Eleven financial years have passed, but no change has been made in the income limit of Rs 10 lakh for imposing the 30 percent tax rate. Only in the new tax regime is a 30 percent tax levied on those earning more than Rs 15 lakh, but taxpayers cannot benefit from tax deductions in this regime.
Will The Middle Class Get Relief?
In such a situation, the question arises whether the Finance Minister will give relief in the budget to the country’s emerging middle class, who contribute the most to increasing demand and consumption. Recently, a Reuters report revealed that relief can be given to taxpayers whose annual income is more than Rs 15 lakh by reducing the tax burden a little so that consumption can increase in the country. If the government relieves such taxpayers, the revenue loss due to increased consumption can be compensated.
