New Delhi: Union finance minister Piyush Goyal has announced a slew of tax breaks for the middle class, including doubling the exemption threshold to ₹5 lakh.
The minister said with the proposed changes in income tax, those with up to ₹6.5 lakh annual income will not have to pay any tax if they make use of deductions allowed for investment. The tax benefit will be even more, if one is to make use of additional deductions such as the ₹50,000 allowed for investments in the National Pension System and medical expenditure.
“This will provide tax benefit of ₹18,500 crore to 3 crore middle class comprising self-employed, small traders, salary earners, pensioners and senior citizens," said Goyal.
The minister also announced increasing the standard deduction from ₹40,000 to ₹50,000. The minister also announced extension of tax breaks available to new housing projects.
The income tax department is moving towards totally automated scrutiny of tax returns and same-day refund of any amount due to the taxpayer, Goyal said.
Goyal said direct tax collection had touched ₹12 trillion in 2018-19, crossing the ₹11.5 trillion originally estimated. Gross direct tax receipt has grown 19.4% from the ₹10.05 trillion collected in 2017-18.
Goyal said direct tax receipts had doubled from over ₹6 trillion in 2013-14 to ₹12 trillion in 2018-19. The number of returns filed have risen from 3.79 crore to 6.85 crore during the period, an 80% increase in the tax base, he said.
The minister outlined taxpayer-friendly measures taken in the past by the National Democratic Alliance (NDA) government, including the tax rate cut for small taxpayers in the lowest tax bracket of ₹2.5-5 lakh.