The Centre is considering a plan to introduce personal income-tax breaks to boost consumption, CNBC-TV18 reported on January 17.
A decision, which aims to make the new tax regime more rewarding for taxpayers, is expected closer to the Budget, with the final call resting with the prime minister’s office and the finance ministry, the report said. It further added that the Centre may increase standard deduction limit from Rs 75,000 a year.
The Centre is looking at expanding the income range for the 20 percent tax rate from Rs 12–15 lakh to Rs 12–20 lakh. The move will come as a huge relief to those in Rs 15–20 lakh bracket.
Moneycontrol couldn’t verify the report independently.
Finance minister Nirmala Sitharaman will present the second full Budget of Modi 3.0 on February 1.
Economists expect the government to stay on the fiscal consolidation path. The Centre has set a deficit target of 4.9 percent for this fiscal and reiterated commitment to bring down the fiscal deficit to 4.5 percent or below by FY26.
There are also reports that the Centre may do away with the old-tax regime. The new regime, which was introduced in the 2020 budget, offers lower rates but unlike the old regime, it has no deductions and exemptions.
