Every year, the Union budget 2021 brings a lot of hope to the common people. In particular, the Middle class expects relief in income tax rates, while the poor & deprived sections of the country look to the government for their upliftment. However, this time the forthcoming budget may shock the medium class people, as the personal income tax slabs are unlikely to change. According to CNBC-TV18, there is no possibility of revising the individual income tax slab in the forthcoming budget for the financial year 2021-22.
However, the Ministry of Finance is considering providing relief in income tax through other measures. The Ministry of Finance is considering a request to increase the exemption limit under section 80C. Currently, a tax exemption of Rs 1.5 lakh is available under Section 80C. The government may increase the exemption under section 80C from Rs 1.5 lakh to Rs 2 lakh in the budget to be presented on February 1.
This change will promote investment and the overall development of the country. The upcoming budget may raise the deduction limit on payment of both home loan interest and principal funds. The current tax slab is 5 percent on income between Rs 2.5 and Rs 5 lakh, 20 percent for Rs 5 to 10 lakh, and 30 percent on income-seekers above Rs 10 lakh. The rates are slightly different for individuals opting for the new tax regime. Union Finance Minister Nirmala Sitharaman will present the budget on February 1, 2021.