Budget 2024-25: The central government may give a gift to the lower middle class in the upcoming budget. He told that the government can change the income tax slab to promote consumption.
The government believes that due to tax relief, people will have more savings, which they will use to buy other things. This will increase consumption in the country and the already strong GDP growth will get further momentum. Let us tell you that the government will present the Budget 2024-25 in the second fortnight of July.
The government is considering raising the exemption limit from income tax slabs from Rs 3 lakh to Rs 5 lakh in the upcoming budget, an official said. This change will apply only to those who file income tax returns under the new tax system. The aim is to leave more money in the hands of low-income people for spending.
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It is important to mention here that the final decision in this regard will be taken when the budget date comes closer. The government first implemented the new tax system in Budget 2020. The rates of this tax system are lower than the old tax system. However, taxpayers do not get the benefit of many types of deductions and exemptions in tax. While filing income tax returns, taxpayers have the option to choose either the new or the old tax system.
Under the old tax regime, taxpayers were eligible for tax exemptions on various investments, insurance, house allowance and leave travel allowance etc. under various sections of the Income Tax Act.
Another official said that industry representatives have requested to reduce the maximum rate of income tax slab from 30 percent to 25 percent under the new tax system. However, this demand is unlikely to be considered by the government.
“There is no possibility of a change in the upper limit of income tax slabs as at the moment there is a need to boost consumption for the lower income group,” the official said. He added that changes in the rates of the old tax slabs are also unlikely to be considered.
