One of the major demands of the Union Budget 2023 is to change the existing personal income tax structure, so as to provide relief to a large section of people, especially the salaried and middle class.
If reports are to be believed, the government is in detailed discussion to overhaul the new personal income tax regime without exemptions with the announcement of a new plan in Budget 2023, reports Financial Daily. livemint Quoting a person familiar with the development,
The report said that the proposals examined include adding more slabs to the new income tax scheme.
The anticipation of this overhaul has been making headlines for the past few weeks.
According to a recent report published by the news agency reuters, He said that the government is ready to make changes in the income tax slabs in the upcoming budget.
Quoting two government sources, the report said that this time the income tax exemption limit can be increased from Rs 2.5 lakh to Rs 5 lakh.
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At present, no tax has to be paid on income up to Rs 2.5 lakh per annum. Also, income up to Rs 3 lakh for individuals in the age group of 60-80 years and up to Rs 5 lakh for senior citizens above the age of 80 years is tax-free.
What is income tax slab?
Income tax is levied on individual taxpayers on the basis of slab system. It is a system where different tax rates are set for different categories of income. This means that the tax rates keep on increasing with the increase in the income of the taxpayer.
The demand to change the structure has been suggested by business leaders across sectors, in order to boost consumption and increase disposable income of the people.
Manish Jeloka, co-head of products and solutions, Sanctum Wealth, said, “On the personal tax front there could be minor changes in tax slabs or an increase in the 80C limit, while we look at selective increase in import duty to boost government revenue.” May see and help the domestic manufacturing sector.Besides this the insurance sector may also see some relief or incentive for faster growth.
Kantar said in a latest survey that increasing the basic income tax exemption limit from the current Rs 2.5 lakh is the most common expectation among consumers, followed by an increase in the highest tax slab rate limit of 30%. 10 lakh from the existing Rs. The former is particularly high among the salaried segment (42%), while the latter is expected to be higher among businessmen/self-employed (37%) and 36-55 year old (42%) segments, it noted.
Yashaswini Ramaswamy, serial entrepreneur and CEO of Great Place to Work India, expressed hope that some changes should be made in the income tax structure in the budget.
“Tax rates have not been considered for revision since FY 2017-18 and this could be an ideal time for a budget revision which would enable more purchasing power and provide some tax relief. For two consecutive years, the ‘middle class’ and ‘lower middle class’ have been affected to a great extent due to the impact of COVID-19 and the situation is tough due to global inflation. They may have the highest expectations from the current system. Whereas India One tax features among the country’s upper class, follow-up on social security is still a long way off,” Ramaswamy said.
Amarnath Halember, executive director and CEO of NextG Apex India, also urged that the budget reduce personal income tax rates to revive consumption demand.
“If consumers have more disposable income, their purchasing power will automatically increase, leading to higher sales of FMCG products. Second, the government should focus on strengthening rural spending power by creating favorable policies in rural areas and encouraging increased demand for consumer packaged products. Third, it is important to reduce packaging costs as they are increasing product prices affecting the spending habits of consumers. Furthermore, the upcoming budget is expected to rationalize GST rates.
Avneet Singh Marwah, CEO, SPPL also suggested that considering the global scenario of recession, it would be really important to make a budget that how it does not hit the common man’s pocket. “It would be great to see if there is some relief in the income tax slab structure.”
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