Breaking News : FM is planning to increase Tax Slab thresholds from Rs 2.5 to 5 Lac

Breaking News : FM planning to increase Tax Slab thresholds from Rs 2.5 Lacs to 5 Lac

Finance Ministry is planning to increase tax slab threshold from Rs. 2.5 Lacs to 5 Lacs

Industry chamber CII has urged the government to double the income tax exemption threshold to Rs 5 lakh and increase the deduction limit under Section 80C to Rs 2.50 lakh to increase savings in the Union Budget.

The Union Budget will be presented on 1st February 2019.

Additional to this the CII has also given some other suggestions to MOF which are as given below:

1.) The highest personal income slab rate should be reduced to 25% from present 30%

2.) Medical and conveyance allowances should also be provided in addition to present 40,000 standard deduction for salaried persons.

3.) The CII has suggested below mentioned change in the Slab Rate of an individual.

 

Current Slab
Income up to Rs 2.5 lakh	Exempt
Income Between 2.5 Lakhs to 5 Lakhs	5%
Income Between 5 Lakhs to 10 Lakhs	20%
Income above Rs 10 lakh	30%

 

 

New Slab structure suggested by CII
Income up to Rs 5 lakh	Exempt
Income Between 5 Lakhs to 10 Lakhs	10%
Income Between 10 Lakhs to 20 Lakhs	20%
Income above Rs 20 lakh	25%

 

4.) The CII has also suggested that irrespective of the turnover the corporate tax rate should be reduced to 25%. It should be further reduced to 18% in phased manner.

5.) It is also a suggestions that long term capital losses should be allowed to be offset with short term which is currently not allowed.

6.) The industry body in its pre-budget 2019 memorandum has also recommended that the provisions of section 17 should be amended and retired employees must be entitled to the tax benefit on medical reimbursements as well as hospitalisation expenditure. The income tax exemptions should be applicable to both domestic and foreign medical treatment, as per the proposals sent by CII.

Compiled by CA Pratibha Goyal. For questions, queries and discussion please comment below. She can be contacted at [email protected]