According to the reports, The government is planning to increase personal income tax exemption from existing Rs 2.5 lakh to Rs 3 lakh in the Union Budget 2019. The move comes at a time when the country is witnessing a sharp slowdown in consumer demand.
It was earlier reported that the government would only consider raising income tax deductions under certain sections of the Income Tax Act.
However, it now seems that the government could increase the personal income tax threshold to Rs 3 lakh in order to provide more tax relief to people. People familiar with the matter said finance minister Nirmala Sitharaman may consider such an increase but added that the measure is yet to get a final nod.
Experts earlier indicated that it should not come as a surprise if the government includes a few additional measures in reducing personal income tax for citizens in order to boost demand.
The increase in personal income tax threshold will provide more flexibility to people and provide a boost to the economy, which recorded a growth of just 5.8 per cent in the first quarter of 2019-20.
If such a move is announced, salaried and working-class taxpayers would get at least Rs 2,500 more.