Budget Expectations: Raising Tax Exemption Limit is the Top Demand

People from across the spectrum want the existing income tax exemption limit of Rs 2.5 lakh to be increased.

(Photo: The Quint)

Considering its direct and immediate impact on the middle class, the income tax rate structure naturally occupies centrespace for most of them as far as expectations from the Union Budget are concerned.

This year seems to be no different as one of the main demands raised by the people in the run up to the Union Budget, to be presented on 1 February, is increasing the income tax exemption limit.

Teachers, businesspersons, senior citizens – people from across the spectrum from various regions – want the existing income tax exemption limit of Rs 2.5 lakh to be increased.

Isaac P Elias, a teacher working in Bengaluru, claims that the salaried class expects a raise of the tax exemption limit to Rs 5 lakh.

His views are echoed by SK Bhagwan, also from Bengaluru, who says:

In the last few years, inflation and the cost of living have gone up exponentially. However, the exemption limits have remained almost the same. The government needs to give relief by raising the income tax exemption limit, probably up to Rs 3.5 lakh.

SK Bhagwan

Now, as per sources, the finance ministry is contemplating hiking personal tax exemption limit from the existing Rs 2.5 lakh per annum to Rs 3 lakh, if not Rs 5 lakh, in the upcoming Budget, reported PTI.

The sentiment of paying too much tax to the government is shared by many.

Forty-two-year-old Chennai resident Rex Fernando questions whether he is going to get any benefits as a taxpayer.

I know that when I pay my taxes, it helps the government to build infrastructure. But I see many people enjoying a lot of benefits even though they pay no tax. As a taxpayer, am I going to get any benefits?

Rex Fernando

Konkana Sarkar, an area sales manager from Kolkata, remarks that the salaried people are the ones who are suffering by paying too much tax to the government.

Similarly, Mumbai resident Cajetan Fernandes claims how taxes (both direct and indirect) in the present scenario take up 30-35 percent of the income, and calls for a reduction of this to 20-25 percent.

Making income tax slabs more beneficial would make people from different income levels feel comfortable in paying tax without hiding anything, adds SK Bhagwan.

Notably, there is also speculation that the tax slabs may be tweaked, with the government expected to lower tax rate to 10 percent on income between Rs 5-10 lakh, levy 20 percent rate for income between Rs 10-20 lakh, and 30 percent for income beyond Rs 20 lakh, PTI has further reported.