Now the income tax level will be changed drastically

New delhi date. September 24, 2019, Tuesday

In order to increase consumer demand, more money is available in the hands of taxpayers, with a direct tax panel suggesting a major change in the levels of personal income tax laws. Four levels have been proposed for the tax rate which include a new level of 5%. It has been proposed to levy a 1 percent income tax on annual income of Rs two crore or more, sources in the Income Tax Department said.

The panel on the Direct Taxes Code (DTC) has proposed raising the exemption limit for collection of income tax to Rs 5 lakh from the present Rs 5 lakh. It is suggested to reduce the rate of tax on annual income with rupees five lakhs to Rs ten lakhs and to keep the rate of tax at 2% on rupees between Rs.

At present, a tax of five per cent is levied on the eligible income from a tax of Rs 2.5 lakh to Rs 5 lakh. Twenty percent of the income of Rs 5 lakh to Rs 5 lakh and 2 percent tax on income of Rs 1 lakh or more.

In the current slab of income tax, the rate of 5% is not kept. If these recommendations are accepted then the five percent level will not be seen. However, an annual income of up to Rs 5 lakh has been provided to the taxpayers from the current year with a relief of Rs 5, which means that up to Rs 5 lakh income tax has been exempt.

Explaining the rationale behind the reduction in tax rates, the source said, "This will make it more available for people to use and invest in their hands." Taxpayers earning between Rs 5 lakh and Rs 20 lakh will be able to spend more money on consumption. However, a change in the tax rate will hit the country's treasury income, a tax expert said. However, if there is an increase in the compulsion of the tax due to the change in the level, there is also a view that there is no significant difference in the income of the government.

The panel, appointed by the government, submitted its report to the finance minister last month. The panel was tasked with recommending how to simplify the complexity of the direct taxation system in the country.