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13 Jun, 2014 10:57 PM

IT exemption likely to be raised from 2 lakhs to 5 lakhs.

IT exemption likely to be raised from 2 lakhs to 5 lakhs.
Unconfirmed reports. Reader discretion is advised

There are reports that government is likely to raise the income tax exemption limit from existing 2 Lakhs to 5 Lakhs. The government is also considering raising the tax exemption limit on home loans and health insurance premium. The health insurance premium could be raised by Rs 5,000. The income tax exemption limit hike was one of the most anticipated move by the government benefiting the employees.

The reduction in the ceiling on Income Tax will lead to more disposable income and increased purchase which in turn will lead to more economic activity and revenue such as increased VAT and excise duty. It will enhance the spending power and will help drive certain sections of the economy that are dependent on discretionary spend such as autos.

BJP election manifesto of 2009 spoke about raising the I-T exemption limit to Rs 3 lakh, and an additional exemption of Rs 50,000 for women and senior citizens. The party's 2014 manifesto did not mention I-T exemption anywhere. 

It is understood that the finance ministry has sought a report from the I-T department to decide on the possibility of making exemption in the tax slab. The Central Board of Direct Taxes (CBDT) is likely to submit a report by June 20.

The government is also thinking of providing delivery of pension funds of old and disabled retired employees at their doorsteps besides ensuring that pension payment order is handed over on the day the employee retires.

Minister of State for Personnel, Public Grievances and Pensions Jitendra Singh said the Pension and Pensioner's Welfare department is trying to ensure that the pensioners lead a life of dignity.

Sources : India Today, CNN IBN



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