The upcoming interim budget slated for announcement on February 1 might include an increase in the tax rebate to Rs 7.5 lakh from the existing Rs 7 lakh in the new income tax regime, as per a report from Mint citing sources familiar with the discussions.
If implemented, individuals earning Rs 7.5 lakh, after a standard deduction of Rs 50,000, would be exempt from paying income tax for the fiscal year 2024-25. The report suggests that Finance Minister Nirmala Sitharaman could introduce a Finance Bill to enact these adjustments.
During Budget 2023, the Centre increased the rebate in the new income tax structure to Rs 7 lakh from the prior Rs 5 lakh. Simultaneously, they raised the basic exemption threshold to Rs 3 lakh from the previous Rs 2.5 lakh. Additionally, a deduction of Rs 15,000 was introduced for a family pension.
The number of income tax slabs was reduced from seven to six, simplifying the personal income tax regulations.
A record 81.8 million income tax returns (ITRs) were submitted for the assessment year 2023-24 by December 31, marking a 9% surge compared to the 75.1 million ITRs filed during the equivalent period in 2022-23.
The government has prioritized boosting tax receipts while reducing the overall tax load. Between April and November of the preceding year, tax revenue witnessed a significant increase of 14.7%, surpassing the budgeted estimates of 10.5% for direct taxes and 10.45% for indirect taxes.
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The Chairperson of the Pension Fund Regulatory and Development Authority, states that the body has suggested that employer contributions to the National Pension Scheme up to 12% that is to be exempted from income tax.
