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Expect rationalisation in income tax rates - GST Station

Expect rationalisation in income tax rates

Expect rationalisation in income tax rates

    Currently, there is a steep jump from 5% to 20% for income between ₹5 lakh to ₹10 lakh. Some rationalization is expected here in the Budget 2019. A decision may also be taken to lower the highest personal income tax rate from existing 30% to 25%. No major change is expected in income tax before the release of Direct Tax Code Report on February 28.

    The limit of Rs.1.5 lakh under Section 80C was last revised in Budget 2014-15. We can expect the government to consider revising this limit, with the due passage of time, this limit no longer holds good. An increase in section 80C limit will help provide more room for tax saving. Healthcare is another area where major announcements are expected. Considering the government’s focus on introducing new healthcare projects for the poor, it would not be surprising in case the government increases tax benefit on healthcare under Section 80D.

    In terms of GST, the Finance Minister is faced with a challenge of falling GST revenues, especially in light of reduction of GST rates on a number of items. Therefore, to meet fiscal deficit targets, the existing tax base may see some reshuffle. There can be some rare relaxation in the education sector.

    Source- Livemint.