NEW DELHI: In the five years of Modi rule, the government extended benefits for individual taxpayers in the initial years by increasing the deduction limits for health insurance, transport allowance and housing loan interest. Last year, salaried taxpayers did not have much to cheer about with the government introducing standard deduction while taking away benefits for transport allowance and medical reimbursement. Will the government, in this poll year, tweak tax slabs? And if it does, what will it mean for the exchequer?
TAXABLE INCOME IN INDIA IS MUCH HIGHER THAN IN SEVERAL COUNTRIES
People in Malaysia start paying taxes at much lower incomes. But in South Africa, Singapore and the United Kingdom taxes kick in at higher incomes.
STILL, INDIA HAS ROOM TO RAISE TAX SLABS
The largest number of taxpayers in India are at the lowest slab. But while the numbers may be large, the revenue generated from this category is relatively small. So, though a tweak would lead to revenue loss, it may not be such a big blow.
The government has budgeted for collections of Rs 5.29 lakh crore in 2018-19 from personal income tax. Thus, the projected revenue loss would be anywhere between 2% and 10% of its current collections, depending on what changes are made.
Source: Times of India