Govt Plans to Raise Income Tax Limit to Rs 3 Lakh, Hike 80C Deduction Limit

Union Finance Minister Nirmala Sitharaman may increase the personal income tax exemption limit to Rs 3 lakh of the annual income from the existing Rs 2.5 lakh for salaried class in the upcoming Budget 2019-20.

At present, income up to Rs 2.5 lakh is exempt from personal income tax. However, income between Rs 2.5 to 5 lakh attracts 5 percent tax plus 4 percent cess, while that between Rs 5 to 10 lakh is levied with 20 percent tax plus Rs 12,500 plus four percent cess. Income above Rs 10 lakh is taxed at 30 percent.

Government is also planning to increase the tax exemption limit for savings and investments made under Section 80C of the Income Tax Act. Currently, the ceiling is Rs 1.5 lakh. Finance Minister Nirmala Sitharaman is due to present the budget in Lok Sabha on July 5.

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