New Delhi, Jan 27 (Agency) In order to put more money in the hands of the tax payer, the Finance Ministry is likely to provide tax relief of up to Rs 80,000 per annum in total tax liability. Sources informed CNBC-TV18 that on the basis of discussion during budget exercise there is strong possibility income tax payers may get relief between Rs 50,000 to Rs 80,000 in the total tax liability. The Centre may increase standard deduction under old income tax regime.
The standard deduction is an amount that is deducted from an individual’s salaried taxable income, thus reducing the taxable income. Finance Minister Nirmala Sitharaman, in Budget 2020, had added three income tax slabs in the tax structure to incentivise more savings. The Federation of Indian Chambers of Commerce and Industry (FICCI) was quoted as saying in a Livemint report that the standard deduction for salaried employees should be increased to Rs 1 lakh. Citing the expenses incurred by employees in setting up home offices, FICCI said that the Centre should consider such a raise in the limit. The Confederation of Indian Industry (CII) has also said that the limit of standard deduction should be hiked substantially due to rising inflation. The report quoted Aditya Chopra, Managing Partner of Victoriam Legalis, as saying that for taxpayers awaiting a pleasant surprise at a time when the economy is battered by the pandemic, the announcement could be a “rabbit in the hat moment”.