Government may increase personal tax exemption limit to Rs 5 lakh in Budget

12 Dec 2022 , 02:05 PM

According to some news reports, Government may consider increasing the personal income tax limit to Rs 5 lakh in the upcoming budget for 2023-24. However, some news reports also stated that there is no certainty regarding this. The government may also go for the option of keeping personal income tax slabs unchanged. 

Exemption of income up to Rs 5 lakh will mean that no tax will be levied on income of up to Rs 5 lakh. If one looks at the personal income tax rates and the indirect taxes that Indians pay, such as GST, Indians are among the most heavily taxed people in the world. High inflation in the past 2 years has reduced the real income of Indians. General Elections will take place inn 2024. In such a scenario it makes economic sense for the government to increase personal income tax exemption limit to Rs 5 lakh, from the existing Rs 2.5 lakh. It will provide much needed relief to Indian citizens. It will also increase disposable income of people. This in turn may give a boost to consumption and the economy.