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.