Centre's Big Bonanza Before 2019 Polls, Budget Likely to Raise Income Tax Exemption to Rs 5 Lakh Per Year
New Delhi: With just few months to go for the 2019 elections, this might be the Centre’s last attempt at influencing the electorate. What was otherwise going to be merely a vote-on-account, the Centre is mulling to increase the tax exemption limit from Rs 2.5 lakh per annum to Rs 5 lakh a year.
The Centre is not likely to make indirect tax policy changes in vote-on-account. The government is also not likely to cut corporate tax rate for remaining 1% corporate taxpayers.
The budget is likely to be presented on February 1, 2019.
While presenting his last full-fledged budget in 2018, Finance Minister Arun Jaitley had not altered income tax rates.
"The government provided enough tax relief to the salaried class in the last three years. I do not propose any further changes in the income tax front," Jaitley had said last year.
The government, however, introduced a standard deduction worth Rs 40,000 per annum for transport and medical reimbursements.
Jaitley in his 2017 budget had reduced rate of income tax to 5% from an erstwhile rate of 10% in the income slab of 2.5 lakh per annum to 5 lakh per annum.
Every individual whose total income exceeds tax exemption limit has to pay income tax based on prevailing rates applicable from time to time.
The income tax exemption limit till last year was 2.5 lakh per annum.
From FY 2017-18 onwards, the contention of 36 months has been reduced to 24 months in the case of immovable property being land, building, and house property.
Long-term capital gain is taxable at 20 percent + surcharge and education cess.
If securities transaction tax is not applicable, the short-term capital gain is added to your income tax return and the taxpayer is taxed according to his income tax slab.