New Delhi. The month of July is special for the working people in many ways. Firstly, this month, the appraisal and increment money has been received. Secondly, income tax returns have to be filed in July itself and the budget can also be presented on the 22nd of this month.
This time the budget can also open a box of relief for the working people. It is being speculated that along with increasing the scope of income tax exemption, the government can also give an additional tax exemption of 50 thousand to the employed people.
Although the industry is demanding all kinds of facilities and exemptions. But, it is believed that the Finance Minister can take two decisions related to personal tax in the budget. This will directly benefit the salaried person and they will save thousands of rupees. It is also being said that the change in tax will be made only under the new regime. The government intends to promote the new regime and is preparing to add more and more taxpayers to it.
Standard deduction may be doubled.
Analysts say that the government can double the standard deduction, giving a big relief to the salaried people. Currently, a standard deduction of Rs 50,000 is available every financial year. This is given in lieu of the expenses of the salaried people and no document is required for this. It is being said that now this limit will be doubled to Rs 1 lakh. This means that the salaried people will get a direct tax exemption of Rs 1 lakh.
Direct tax exemption of 5 lakhs
Finance Minister Nirmala Sitharaman can make another announcement regarding tax in this year’s budget. It is speculated that the basic exemption can be increased from 3 lakhs to 5 lakhs. In the new tax regime, the basic exemption is 3 lakhs right now, while in the old regime it is only 2.5 lakh rupees. By increasing this exemption to 5 lakhs, people from low income to high income earners will be able to save thousands of rupees in tax.
Zero tax on income up to Rs 8 lakh
If the government increases the standard deduction from Rs 50,000 to Rs 1 lakh, then the tax exemption available under the new regime will also increase from the current Rs 7.5 lakh to Rs 8 lakh. Those earning more than this will also benefit if the basic exemption is increased to Rs 5 lakh. After this decision, the tax calculation will start from earnings above Rs 5 lakh. If we go by the current slab, there is a 5% tax on income from Rs 3 lakh to Rs 6 lakh, which will be levied after Rs 5 lakh. This simply means that while earlier there was a tax of Rs 15,000 at the rate of 5% on income from Rs 3 lakh to Rs 6 lakh, now the tax will be only Rs 5 lakh.
