INSUBCONTINENT EXCLUSIVE:
limit of Rs 2.5 lakh is unlikely to be raised in the forthcoming full Budget 2019-20, according to informed sources, as the Finance Ministry
has already announced a provision whereby individuals earning up to Rs 5 lakh can get full tax rebate under Section 87A.Those earning Rs 5
lakh per annum will, however, be required to file tax returns even if they have zero tax liability.There is a huge expectation from the new
Finance Minister of an increase in the basic exemption limit from Rs 2.50 lakh to Rs 5 lakh.Though, there is an expectation among salaried
class that the Modi 2.0 government would reward them for voting it to power, officials here have earlier said that increasing the basic
exemption limit to Rs 5 lakh will defeat the purpose of the interim Budget announcement.According to them, increasing the basic exemption
limit will not require many people to file income tax and it could result in a dip in tax filing, and would even defeat the purpose of
expanding the tax base.Tax experts have suggested to the Finance Minister in their pre-Budget meeting that raising the basic income tax
exemption level would not prove to be a wise move since the Narendra Modi-led government's focus has been on increasing the country's
taxpayer base.There is also little possibility that the government would tweak the existing tax slabs in a way that a 10 per cent tax rate
applies to those earning up to Rs 10 lakh, instead of the existing 20 per cent.Sources said there could be some additional tax-saving
measures for salaried individuals.Income tax collections have been lower-than-expected which also does not support any possibility of
raising the exemption limit.Sources also said that there is no possibility of the threshold for the highest 30 per cent tax rate being
raised to apply to incomes above Rs 15 lakh in the upcoming Budget but could happen in future years.The Finance Ministry is not only looking
to increase the taxpayer base but also wants to increase revenue from taxes as it needs to invest aggressively to revive growth and
Therefore, there are minimum chances that the government would tinker with income tax rules in the upcoming Budget.
