Budget 2019: Is an increase in income tax exemption limit on the anvil?

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Published: June 20, 2019 4:04:55 PM

India Union Budget 2019: Finance Minister Nirmala Sitharaman may raise the tax exemption limit for working-age individuals to 300,000 rupees ($4,316) of their annual income, up from the current 250,000 rupees, the people said, asking not to be identified as they aren’t authorized to speak publicly about the proposals.

Budget 2019-20Budget 2019-20: Any tax exemptions will add stimulus to an economy that’s slowed sharply this year, with growth reaching a five-year low of 5.8% in the first three months of the year.

Union Budget 2019: India is considering increasing the personal income tax threshold in next month’s budget, according to people familiar with the matter, as authorities seek to kickstart consumption in the economy.

Finance Minister Nirmala Sitharaman may raise the tax exemption limit for working-age individuals to 300,000 rupees ($4,316) of their annual income, up from the current 250,000 rupees, the people said, asking not to be identified as they aren’t authorized to speak publicly about the proposals. The tax measures haven’t been finalized yet.

Any tax exemptions will add stimulus to an economy that’s slowed sharply this year, with growth reaching a five-year low of 5.8% in the first three months of the year.

Also read: Budget 2019: Easier tax compliance, clarity in e-KYC; what small businesses want from Nirmala Sitharaman

The proposed tax move would put at least 2,500 rupees more in the hands of each of India’s 50 million taxpayers. It could also add to pressure on the budget deficit, which is pegged at 3.4% of gross domestic product for the current fiscal year that began on April 1.

The Finance Ministry is also looking at raising the tax exemption limit for savings and investments made under the so-called Section 80C of the Income Tax law, the people said. The ceiling is currently set at 150,000 rupees.

D.S. Malik, a spokesman for the finance ministry, declined to comment as budget discussions are confidential. Sitharaman is due to present the budget in India’s lower house of parliament on July 5.

Do you know What is Finance Bill, Short Term Capital Gains Tax, Fiscal Policy in India, Section 80C of Income Tax Act 1961, Expenditure Budget? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

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