The government is thinking of providing relief to millions with the new move
Modi 2.0 government is planning to increase the threshold of personal income tax exemption from 2.5 lakh 3 lakh in the upcoming budget 2019. The move comes at a time when there has been a slight decline in consumer demand.
It was earlier speculated that the Indian government will make changes only in certain sections of the Income Tax Act for income tax deductions. However, according to a recent report Government is likely to increase the threshold of personal income tax to 3 lakhs to give more tax relief to the citizens and boost the demand.
The Finance Minister of India Nirmala Sitharaman may consider the new tax relief but the measure hasn’t got the final Nod.
New measures haven’t been given a nod
It is said that the Government might bring new measures in increasing the threshold of personal income tax. This move will benefit India in increasing the demand which will also boost the economy of India. The Indian economy hasn’t grown with minimal 5.8 % in the first three months of the year 2019.
If the move is announced it will benefit the working and salaried-class taxpayers with Rs 2,500.
The new tax slab will hurt the fiscal deficit
Our Economy is in such a situation that one measure benefits in some way can also have a negative impact. This could add more pressure on the fiscal deficit or budget deficit. The fiscal deficit has been pegged at 3.4 percent of the GDP in the current fiscal which started April 1, 2019.
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