When Finance Minister Nirmala Sitharaman presents the Union Budget 2023-24 on February 1, 2023, the salaried class hopes that she will raise the income tax exemption limit from the current limit of Rs 2.5 lakh to Rs 5 lakh as part of their budget wishlists.
There are currently two income tax systems, one old and one new, each with different tax slabs. Under the old tax system, citizens with a pay of up to Rs 5 lakh get refund, so they don’t pay income tax.
However, if annual income exceeds Rs 5 lakh, tax liability is based on tax slabs. Therefore, assesses in various tax slabs will see their tax bills decrease if the Centre decides to raise the threshold in the upcoming budget.
The government has been under pressure from taxpayers for the past few years to raise the income tax exemption limit from Rs 2.5 lakh to Rs 5 lakh. The demand is also supported by a variety of business lobby groups.
Industry lobby Associated Chambers of Commerce and Industry of India (ASSOCHAM) has proposed that the income tax exemption limit be raised to Rs 5 lakh in the budget for the years 2023 and 2024. The body predicts that people will have more money in their pockets.
Sumant Sinha, president of ASSOCHAM, stated that the government should have enough leeway to raise the income tax exemption limit given the buoyancy in both direct and indirect taxes.
According to Deepak Sood, Secretary General of ASSOCHAM, “Boosting consumption by leaving more money in the hands of consumers, is a low-hanging fruit for a further recovery in economic growth.”
