Why the Govt. should hike the tax exemption limit ?
Raising the tax exemption was one of BJP’s promise in the Election Manifesto. The income tax slab might be raised by Finance Minster Arun Jaitley in the upcoming budget. This expected tax concessions in income tax is needed high time as middle class households are largely impacted by high inflation and steady increase in fuel prices. The probability of curbing inflation and fuel prices is not easy as poor monsoon so far and tensions in middle east
Deduction in the direct tax will result in more savings and moreover will drive more consumer spending where Govt can capitalize on this by getting more VAT and excise duty.Increasing the tax slab from 2 lakhs to 5 lakhs will animatedly help 3 crores tax payees and the govt is supposedly loose revenue close to 30000 crores.Raising the slab will improve the spending power of the middle class which will create more demand, more manufacture and more jobs which will ultimately help in economic growth.
Revising upwards the exemption limits on various allowances and reimbursements such as the conveyance allowance and medical reimbursements will help the middle class tax payee to improve their take home salary. Rather that focusing on financial control imposed by Reserve bank of India to control inflation the government should focus on anti- inflation measures like this to curb inflation and promote economic growth. It would be a great if the budget meets the expectations of the ordinary citizens of India than the business community.