Revenue secretary ends confusion over income-tax cut in Budget

If you include various deductions, then the people having income even up to Rs 8-9 lakh also will not have to pay 67790185 67789856 67790681 any income tax and similarly standard deductions also have been increased for salary earners and pensioners from Rs 40,000 to Rs 50,000, Ajay Bhushan Pandey, Revenue Secretary, tells ET Now. Edited excerpts: Let’s talk about the revenue outgo in totality on some of the things that you have done, the tax breaks that you have given because that is going to make up the budget mathematics. During the last four and a half years, the government has undertaken a series of tax reforms and because of this, the tax collection almost doubled. Also, the tax base has increased significantly. Though it is an interim budget -- as per the convention, the tax proposals, mean tax proposals are presented in the full budget -- but on 1st of April, those who are low tax payers, middle class need certain certainty regarding their tax burden in the upcoming year. Therefore the government has announced certain tax reliefs particularly for the middle class salary earners, small businessmen, traders, pensioners and the senior citizens. As our honourable minister announced in the parliament today, anyone having gross taxable income up to Rs 5 lakh, will not have to pay any tax because they will get full rebate of the income tax. What it means is that even those who have a gross income higher than Rs 5 lakh, for example Rs 6.5 lakh, if they make investments permissible under 80C of the Income Tax Act, that is provident fund and several other savings and if they make investment up to Rs 1.5 lakh, they also will not have to pay tax. Further, supposing somebody has bought a house and if he is paying interest, now the interest up to Rs 2 is also deductible from the gross income. Similarly, Rs 50,000 is deducted on the national pension schemes. If you include various deductions, then the people having income even up to Rs 8-9 lakh also will not have to pay any income tax and similarly standard deductions also have been increased for salary earners and pensioners from 40,000 to 50,000. I am a little intrigued why the government has preferred to give the tax sops to individuals rather than reducing the corporate income tax as was promised during the first Budget? The main tax proposal will be considered at the time of the regular budget. We all know that this is an interim budget and in the interim budget only very urgent things are considered. The finance minister also explained in the parliament that the low-income earners need certainty in their minds on 1st of April vis-a-vis how much will be their tax burden in the upcoming year Therefore, whatever was the tax proposal pertaining to that class of people that has been announced. But that does not mean that these will be the only tax proposals for the entire year. The main tax proposal will still be deliberated and brought at the time of the regular budget.

from Economic Times http://bit.ly/2BhQgut