Budget 2019: Big bonanza from Modi government? Income tax exemption limit to be increased to Rs 5 lakh
Budget 2019: Union Finance Minister Arun Jaitley will present interim budget for 2019, ahead of general elections, on February 1. This presentation of financial statement is not going to be a routine exercise for the present dispensation, as the BJP-led central government seems to be placating middle class and salaried classes with some respite after introducing 10% reservation for economically weaker section (EWS) in jobs and educational institutions through 124th Constitutional amendment. Citing sources, Zee Business TV has come to know that the government would give this surprise gift to salaried segment of society, after getting recommendations from the party as well as industry organisations.
According to Zee Business report, the government has most probably made up its mind to please the salaried and middle class people so that they can be pleased ahead of the 2019 Lok Sabha elections, slated after a few months. If the Modi government goes ahead in this direction, those who are earning upto Rs 5 lakh annually will no longer pay any income tax.
The news channel has also come to know that recently held national executive of the Bharatiya Janata Party (BJP) also asked the goverment to give income tax relief up to Rs 5 lakh as the recent EWS quota covers general category having income up to Rs 8 lakh, creating friction in the minds of working people paying 20% tax on their income above Rs 5 lakh.
Further, industry body has also urged the government to spare this segment (earning upto Rs 5 lakh) and impose tax 10% tax on the income from Rs 5 to Rs 10 lakh. So far, this group has been paying 20% tax.
Looking at these factors, the news channel report said the government most probably will go ahead with slashing tax limit for working people in the interim budget 2019.
Notably, in the income tax present structure, people earning between Rs 2.50 lakh and Rs 5 lakh pay 5% income tax along with 4% cess that comes around Rs 13000 yearly. If the government increased income tax limit, this group will have an additional saving of Rs 13000 in a year.