Good News from the Center for Those Earning Less Than Rs.15 Lakh Per Year. No Tax Up to Rs.15 Lakh to Boost Consumption.
National media reported Thursday that the center plans to eliminate the income tax burden for individuals earning less than Rs.15 lakh in a financial year.
This initiative is expected to increase Consumption and benefit the economy. Removing the tax will positively impact millions of people.
Reuters says these benefits will only be available if the new tax system is adopted, though the related procedures have not yet been finalized.
The final decision may be announced before the budget presentation on the first of next month. Under the current economic policy, individuals with an annual income between Rs. 3 lakh and Rs. 15 lakh are subjected to a 5-20 percent tax rate.
Those earning more than Rs. 15 lakh pay a 30 percent tax. In contrast, the proposed new tax policy suggests a 0 percent tax on income up to Rs. 3 lakhs, followed by a 5 percent tax on earnings between Rs. 3 lakh and Rs. 7 lakh, 10 percent on the Rs. 7-10 lakh bracket, 15 percent for the Rs. 10-12 lakh bracket, 20 percent for those in the Rs. 12-15 lakh bracket, and 30 percent tax on income exceeding Rs. 15 lakh.
Currently, taxpayers have two options: The first scheme provides tax relief on expenses such as house rent and insurance, which can help taxpayers save money. The second plan, introduced in 2020, offers lower tax rates but does not include exemptions like house rent.
However, the government indicates that more individuals are switching to the new scheme due to its lower tax rates. Most taxpayers in the country have an annual income of up to Rs. 10 lakh, making this bracket the majority.
Declining GDP: Our country’s GDP growth, now the fifth largest economy in the world, dropped to a seven-quarter low in the September quarter.
Experts suggest that the government should stimulate spending in the middle class to enhance GDP growth. Due to high inflation, people are struggling to spend more, leading to decreased demand for products such as soaps, shampoos, and automobiles.
This situation is evident in both rural and urban areas. The middle class is urging the center to reduce the high taxes imposed on them.
Experts believe there is significant dissatisfaction among this group since salaries have not kept pace with rising prices, resulting in shrinking household budgets.