To appease the middle and upper middle class tax payer, the Modi government is contemplating to raise the tax exemption limit to Rs 5 lakh from its existing limit of Rs 2 lakh, according to the informed sources.
They say the finance ministry had sought a report from tax department on the subject and asked it to submit by June 20.
The business channel which was flashed the news also said the government is also considering raising the tax exemption limit on home loans and health insurance premium, which is likely to be raised to Rs 5,000.
The tax exemption limit, if raised to Rs 5 lakh, will impact on those tax payers who all under the slab between Rs 5 lakh to Rs 10 lakh. They may have to pay possibly 10 per cent. Accordingly the slabs would effect.
Though it is yet to be confirmed, to recall election speeches, the present Finance Minister Arun Jaitley expressed that the I-T ceiling should be increased to Rs 5 lakh level, which is the demand of about 30 million people. The impact on the national tax fund would be about Rs 24 crore, which is a negligible, he felt.
