Tuesday, February 27, 2024

Will there be exemption on income tax or will the burden increase, this is what economists expect from the budget

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Finance Minister Nirmala SitharamanImage Credit source: File Photo : PTI

Finance Minister Nirmala Sitharaman will present the general budget in the next few days. In the budget, especially the working people, their eyes are mainly on the announcements and relief on the income tax front. Economists have different opinions on this. Some say that the government can provide relief to taxpayers by increasing the amount of standard deduction in the interim budget to be presented next month before the general elections and give some separate tax exemption for women. However, some also believe that this is an interim budget, so no changes are expected in the income tax matter.

Finance Minister Sitharaman will present the interim budget for 2024-25 in the Lok Sabha on February 1. This is his sixth budget. Sudipto Mandal, Chairman of the Center for Development Studies, says that in the interim budget, working people and the middle class may get some relief on the income tax front. Some relief is expected to be provided by increasing the amount of standard deduction, but it should also be kept in mind that the poor and lower middle class do not pay income tax.

This much discount is available now

At present there is an exemption of Rs 50,000 under standard deduction. In response to the question related to relief to taxpayers, Pramod Kumar, director of Giri Vikas Adhyayan Sansthan, Lucknow, says that it is difficult to say anything about it. Apart from economic factors, it also depends on many other things. However, given the fact that this is an interim budget being presented before the general elections, some concessions may be made to attract the votes of taxpayers.

little hope for change

NR Bhanumurthy, economist and currently Vice Chancellor of Dr. BR Ambedkar School of Economics University, Bengaluru, said that this will be an interim budget. In such a situation, one should not expect much change in the tax system because its purpose is only to get approval on the expenditure budget till the budget of the entire year is presented. Anyway, frequent changes in tax system and structure can have an adverse impact on compliance. Therefore, I do not expect any changes in the income tax system.

This is the current tax system

At present, under the old tax system, the tax rate on income up to Rs 2,50,000 is zero. Whereas the tax rate on income of Rs 2,50,001 to Rs 5,00,000 lakh is five percent, on income of Rs 5,00,001 lakh to Rs 10 lakh, it is 20 percent and on income of Rs 10,00,001 and above, the rate of tax is 30 percent. Is. In the new system, the tax rate on income up to Rs 3 lakh is zero. Five percent on income from Rs 3,00,001 to Rs 6,00,000, 10 percent on income from Rs 6,00,001 to Rs 9,00,000, 15 percent on income from Rs 9,00,001 to Rs 12,00,000, 15 percent on income from Rs 12,00,001 to Rs. Taxpayers’ rate is 20 percent on income up to Rs 15,00,000 and 30 percent on income above Rs 15,00,000.

Tax relief has been given in both the tax systems. Under the new taxpayers system, taxpayers with income up to Rs 7 lakh will be eligible for exemption under Section 87A of the Income Tax Act. Whereas under the old system, the exemption limit for taxpayers paying Rs 5 lakh remains.


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