Winning Bizness Desk

Mumbai. After getting cold response from the voters in the recently concluded Lok Sabha polls, Prime Minister has learnt some lessons and therefore, his government is contemplating to give tax relief to the countrymen. In a few weeks. This government may present the full budget for the financial year 2024-25 and the middle class and taxpayers are expected to get relief. According to insiders, Modi 3.0 is considering cutting income tax rates for people earning ₹ 10 lakh annually in its first budget. Apart from this, the government is planning to change the income tax slab. Notably, finance minister Nirmala Sitharaman had presented the interim budget for FY 2025 on February 1 and she did not make any major announcement related to income tax.

Tax exemption limit to ₹ 5 lakh!

It is believed that the government can give this relief to a special salary class and the middle class. At the same time, it can increase the income tax exemption limit from ₹ 3 lakh to ₹ 5 lakh in the budget. This change will apply only to those who file returns under the new tax regime.

20% tax on income of Rs 10 lakh

There are a total of 5 slabs of income tax in the old tax regime. In these, income up to Rs 2.5 lakh is tax free and 5% tax is levied on income from Rs 2.5 lakh to Rs 5 lakh. At the same time, 20% tax has to be paid on income of ₹5 lakh to ₹10 lakh and 30% tax is levied on income from ₹10 lakh to ₹20 lakh and those earning more than ₹ 20 lakh have to pay 30% tax. Whereas, in the new tax regime, salary up to Rs 7 lakh still comes under the tax free category. According to reports, there is a possibility of change in the structure of income up to Rs 10 lakh in the budget. Currently, 20% tax is levied directly on salary up to 10 lakh. The government can change this. 20% tax on income up to 10 lakh can be reduced to 10%. Apart from this, changing the 30% tax slab is also being considered.

Save tax on investments up to Rs 1.5 lakh through 80C

Many people start investing to save tax before the end of the financial year. Under Section 80C, you can claim a deduction of Rs 1.5 lakh from your total income. In simple language, you can reduce your total taxable income by up to Rs 1.50 lakh through Section 80C. You can take advantage of this by investing in other schemes including term insurance, 5-year FD and senior citizen savings schemes.