Budget 2019: Fingers crossed on income tax exemption limit!

The Budget 2019 is anticipated to be a populist one with the ruling government eyeing the middle class votes in the upcoming Lok Sabha polls this year. Catering to expectations, the Modi-led BJP government might alter the income tax exemption limit from the current Rs 2.5 lakh to Rs 5 lakh. If this announcement is made, then a lot of taxpayers would be affected by the change.

To begin with, the current tax slabs look like this: Individuals earning up to Rs 2.5 lakh per annum are exempted from paying income tax. Individuals who earn up to Rs 5 lakh are required to pay 5% tax, along with cess. The next slab is of taxpayers earning from Rs 5 lakh to up to Rs 10 lakh who need to pay 20% tax, along with cess. The last slab that pays the highest amount of income tax of 30% includes individuals who earn upwards of Rs 10 lakh.

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Moreover, the industry body has also recommended lowering the highest income tax payable from 30% to 25%. Additionally, if FICCI's wishes are to be kept in mind then the highest tax slab will only include individuals earning more than Rs 20 lakh.

It is still to be seen if the Modi government will keep all these wishes in mind but if it is announced, then the tax slabs will undergo a massive change in structure.

The Union Budget 2019, which will be an interim one, is the Modi government's last chance to appease the significant voter base of the middle class. The Union Budget 2019 will be tabled by Finance Minister Piyush Goyal, who only recently took over from Union Minister Arun Jaitley. Jaitley who will give the Budget 2019 a miss is in the US and recovering from a surgery.

(Edited by Anwesha Madhukalya)

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