Income tax exemption threshold may be doubled: Sources
New Delhi: Finance Minister is contemplating to double the income tax exemption threshold from the present Rs 2.5 lakh to Rs 5 lakh, for the salaried class, sources said.
Currently, income up to Rs 2.5 lakh is exempt from personal income tax. Income between Rs 2.5-5 lakh attracts 5 percent tax, while that between Rs 5-10 lakh is levied with 20 percent tax. Income above Rs 10 lakh is taxed at 30 percent. Rs 5 lakh exemption is only applicable to individuals of over 80 years.
Sources said that the decision has been taken to bring parity between tax payers after the government’s decision to implement 10 percent reservation in jobs and educational institutions for the economically backward section in the general category.