Finance Minister Nirmala Sitharaman may present the Budget for the year 2020-21 on February 1. That will be the budget of expectations. Common people are hoping that the finance minister can give them an exemption on the income tax front on the lines of reduction in corporate tax. I am expecting a tax of five per cent on the first slab ranging from Rs 2.50 lakh to Rs 5 lakh. At present, the common people expect that income tax can be reduced from 20 per cent to 10 per cent on income ranging from Rs 5 lakh to Rs 10 lakh. Similarly, income tax should be 20% on annual income ranging from Rs 10 lakh to Rs 25 lakh.
Surcharge on high income
My suggestion regarding the upcoming Union Budget is that the tax should be kept at 25% on income ranging from Rs 25 lakh to Rs 1 crore. Income of more than one crore can be taxed at 30 percent because people with such income can pay more tax. Apart from this, I also urge the Finance Minister to remove the surcharge on people who pay more tax. This is because according to Laffer's Curve, the higher the government charges tax, the lower the tax collection.
Relief for income of more than five lakh
Indian citizens get a tax rebate of up to Rs 12,500 on annual income up to Rs 5 lakh. Currently, as soon as the income crosses this limit, the person is liable to pay tax of Rs 12,500. In many cases, income above Rs 5 lakh is not even Rs 12,500, yet so much tax is payable. Such people are most upset. Some provision should be made to provide relief to such people.
Home Buyers get relief
As per the tax related rules, tax rebate can be availed on interest up to Rs 2 lakh on home loan taken for your stay. At the moment, no matter how much interest is paid by a person, it does not matter. At present, a person can claim tax exemption for his two properties, but in this case also, the maximum exemption limit is only two lakh rupees. Such people should get more tax exemption on a proportional basis.
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