Government could raise income tax exemption limit to Rs 3 lakh in Budget

The government may go in for raising the income tax exemption limit to Rs 3 lakh from Rs 2.5 lakh in Union Budget 2015–16 to place more money in the hands of consumers so that demand picks up. If the proposal is approved, it is also likely to entail some changes in the tax slabs bringing more relief to people in the lower-income brackets and taxing those in the high-income slabs more. The lowest slab will cover those in the Rs 3 lakh–Rs 10 lakh bracket and they will be charged 10 per cent. Earlier, the lowest slab extended up to Rs 5 lakh. Those in Rs 5 lakh–Rs 10 lakh slab had to pay 20 per cent tax.

– Gopal Ravi Kumar & Subas Tiwari