With anticipations of a considerable income relief for the middle class rising, it shows Finance Minister Nirmala Sitharaman could offer them when she presents Union Budget 2020.
CNBC Awaaz’s Manish Desai got to know from sources that the 5 percent income tax slab may be slowed down from Rs 2.5 lakh-Rs 5 lakh at present to Rs 2.5 lakh to Rs 7 lakh.
For income bracket from Rs 7 lakh to Rs 10 lakh, the tax intended is 10 percent. For Rs 10 lakh to Rs 20 lakh bracket, 20 percent is intended.
For Rs 20 lakh to Rs 10 crore, the bracket may attract see 30 percent tax and for income of Rs 10 crore and more, the rate is will be 35 percent.
If the above declaration comes through, it could cause large savings for the salaried.
For example, for individuals earning Rs 10 lakh, Rs 15 lakh and Rs 20 lakh, respectively, it could give in savings of Rs 60,000, Rs 1.1 lakh and Rs 1.6 lakh, respectively.
The above estimation does not consider the effect of cess.
Experts believe that personal income tax cuts can bring extra money in the hands of the middle and lower middle classes that will impel expenditure and investment costs.
They also believe that the income tax cuts could improve market
Others have categorically
argued against personal tax cuts on the grounds that income tax cuts would help
only a small percentage of the population and it may not be the best alternative
to encourage growth. They think that the government should use the money it has
to spend and encourage demand.