New Regime Changes: A few days are left for the presentation of the general budget, before which most of the discussions and hopes rest on the issue of whether the government gives tax exemption in the budget or not.
The biggest demand is that the taxable income limit should be increased from 2.5 lakhs to 5 lakhs (taxable income limit). According to media report, the government can give good news on this. Sources told that the government can make changes in the New Tax Regime to make the new tax system attractive. After the presentation of the budget, income up to Rs 5 lakh may become tax free.
Income up to 5 lakh can be exempted (Tax Exemption Limit)
It is reported quoting sources that the government’s focus is on making the new tax system attractive. Under this, it is being considered to give tax exemption on income up to 5 lakhs. At present, no tax has to be paid on income up to Rs 2.5 lakh. At the same time, there is a provision of 5% tax on income between 2.5 lakh to 5 lakh. At the same time, there is no tax on income of 5 lakhs in the old tax system. In such a situation, the government is considering making these changes to make the new tax system more popular.
It is known that the inclusion of exemption on home loan interest in the new tax system is under consideration. Along with this, preparations are being made to include standard deduction exemption in the new tax system. In the new tax system, 30% tax can also be reduced. Even in the old tax system, the tax rate of 5-15 lakhs can be reduced.
The government had optionally introduced a new tax regime in the 2020 budget, in which six new slabs were introduced – 5%, 10%, 15%, 20%, 25%, and 30%. There are three slabs of 5%, 20% and 30% in the old slab, with which all the benefits of tax deduction are available, which are not available in the new tax regime.
At the same time, in the new regime, there is no tax on annual income of 2.5 lakhs. Income up to 2.5-5 lakhs is taxed at 5%. 10% tax on annual income of 5-7.5 lakhs, 15% on income between 7.5 lakhs and 10 lakhs, 20% tax on income between 10 and 12 lakhs, 25% between 12.5 lakhs and 15 lakhs and 15 lakhs Income above 30% is taxed annually.
Government can take big decisions in the last full budget
Modi government is going to present its last full budget this year in Modi 2.0 tenure. In such a situation, it is being speculated that the government can bring a populist budget this time. Lok Sabha elections are going to be held next year, in such a situation only the interim budget has to come next year, so the government can take big decisions only this year. Tax exemption can be a big announcement, so it is expected that this time there can be relief in tax.
