Income Tax Slab Rates: The government had started the optional income tax system in the general budget 2020-21. In this, individuals and Hindu Undivided Families (HUFs) are taxed with lower rates. However, other tax exemptions like rent allowance, home loan interest and investment under 80C are not given in this system.
Nirmala Sitharaman on Income Tax: Finance Minister Nirmala Sitharaman will present the general budget on 1 February. This will be the last full budget of the Modi government before the 2024 Lok Sabha elections. Employed people are waiting for exemption in income tax from the Finance Minister. But before that tax experts have given a statement on the new tax slab. Tax experts said that in order to make the optional tax system attractive in the upcoming general budget, deduction should be allowed through PPF and other tax saving schemes. Along with this, he has demanded to increase the limit of maximum 30 percent tax slab to Rs 20 lakh.
The government had started the optional income tax system in the general budget 2020-21. In this, individuals and Hindu Undivided Families (HUFs) are taxed with lower rates. However, other tax exemptions like rent allowance, home loan interest and investment under 80C are not given in this system.
What is the tax slab in this
Under this, the total income up to Rs 2.5 lakh is tax free. After this, 5 per cent on total income from Rs 2.5 lakh to Rs 5 lakh, 10 per cent on total income from Rs 5 lakh to Rs 7.5 lakh, 15 per cent on income from Rs 7.5 lakh to Rs 10 lakh, from Rs 10 lakh Income up to Rs 12.5 lakh is taxed at 20 per cent, income from Rs 12.5 lakh to Rs 15 lakh is taxed at 25 per cent and income above Rs 15 lakh is taxed at 30 per cent. Taxpayers were not very enthusiastic about this scheme, because in many cases they had to pay more tax for adopting it.
Experts said this on the new tax system
Experts said that in order to make the optional tax system attractive, Finance Minister Nirmala Sitharaman should also include some popular tax cuts in Budget 2023, besides increasing the limit of tax free income and higher tax rate. Rakesh Nangia, chairman of Nangia Andersen India, said that the government should make tax rates more rational in the optional tax system. He advocated to make it according to the foregoing deductions or exemptions.
Deloitte India partner Sudhakar Sethuraman said the government may consider allowing some deductions. He said that this should be done without complicating the process. He said that life insurance premium, home loan interest and other deductions can also be given in this scheme.
