Govt may double income tax exemption limit to Rs5 lakh per year: report

The centre is expected to announce a doubling of the income tax exemption limit from Rs2.5 lakh per annum to Rs5 lakh a year, when it presents the budget on 1 February, says a report in the BusinessLeague website.

The finance minister is expected to leave corporate tax rates unchanged. He will also indirect tax policy unchanged in the vote-on-account budget, says the report.
There is speculation, however that finance minister Arun Jaitley, who has gone to the US for medical check-up, will be back by the time the budget is presented.
While presenting his last full-fledged budget in 2018, Finance Minister Arun Jaitley had not altered income tax rates. But, with just few months to go for the 2019 elections the centre may make an attempt at influencing the electorate by tax sops, according to the report.
“The government provided enough tax relief to the salaried class in the last three years. I do not propose any further changes in the income tax front,” Jaitley had said last year.
The government, however, introduced a standard deduction worth Rs40,000 per annum for transport and medical reimbursements.
Jaitley in his 2017 budget had reduced rate of income tax to 5 per cent from the earlier rate of 10 per cent in the income slab of 2.5 lakh per annum to 5 lakh per annum.
Every individual whose total income exceeds tax exemption limit has to pay income tax based on prevailing rates applicable from time to time.
The income tax exemption limit till last year was 2.5 lakh per annum.
From FY 2017-18 onwards, the contention of 36 months has been reduced to 24 months in the case of immovable property being land, building, and house property.
Long-term capital gain is taxable at 20 per cent + surcharge and education cess.
If securities transaction tax is not applicable, the short-term capital gain is added to your income tax return and the taxpayer is taxed according to his income tax slab.