New Delhi: The budget 2014-15 may come as a relief for the salaried class, as the new government is planning to restructure India’s Tax regime. The Centre is most likely to increase the Income Tax slab limit for exemption from Rs 2 lakh to more than Rs 3 lakh.
According to the existing tax regime, there are three tax slabs. People with income upto Rs 2 lakh are exempted from paying any tax, those earning between Rs 2 lakh to 5 lakh need to pay 10 per cent of their income as tax, those earning between Rs 5 lakh to 10 lakh pay 20 per cent of their income as tax and the ones earning more than Rs 10 lakh pay a tax of 30 per cent.
Therefore, Centre’s decision of overhauling the country’s tax regime can prove to be a pocket friendly change for the tax-payers, because increased income tax slab limit means people will be left with more disposable income. And when people have more money at hand, the investments and consumption spending increase, so does the savings.
