New Delhi, January 14: The tax exemption limit is likely to be raised upto Rs 5 lakh in the Interim Budget 2019, which is scheduled be released by the Centre on February 1. The current tax exemption limit is Rs 2.5 lakh, providing relief to only a small section of the salaried class. Those drawing annual income beyond the above-mentioned amount are subjected to taxes in slabs.
Those earning between Rs 2,50,000 to Rs 5,00,000 per annum are charged 5 per cent as income tax, whereas, those earning above Rs 5 lakh and below Rs 10 lakh are mandate to pay 20 per cent of their income in the form of tax. An annual income above Rs 10 lakh attracts 30 per cent income tax. Interim Budget 2019: Middle Class Likely to be Wooed by Narendra Modi Govt; Higher 80C, Housing Loan Exemption Limit on Cards.
Reports on Monday, citing top government sources, claimed that the Finance Ministry is mulling over increasing the tax exemption limit to provide immediate relief to the middle class. The move could also yield a positive outcome for the ruling BJP in the upcoming general elections.
#NewsAlert | Centre mulls increasing income tax exemption limit for individuals to Rs. 5 lakh & may announce the move in the upcoming vote on account. Sources say indirect tax policy is unlikely to see any change: Sources to CNBC Tv18 pic.twitter.com/XBDereSNE1
— News18 (@CNNnews18) January 14, 2019
The reports come days after Prime Minister Narendra Modi, in an interview to news agency ANI, said it is essential for the government to reward the middle class -- comprising majorly of the salaried section -- whom he described as the "most honest taxpayers".
Modi had further claimed that his government is committed to the welfare and upliftment of the middle class, adding that various steps have been taken in the last four-and-a-half years to ease their burden.