Income Tax slab, 80C limit to be raised in Union Budget 2019: Sources

The first Union Budget of the Narendra Modi 2.0 government could see the Income Tax slabs raised, and 80C limit increased, sources have told Zeebiz. This is expected to be announced by Union Finance Minister Nirmala Sitharaman shen she presents her first Union Budget in the Lok Sabha on July 5.

Sources in the Finance Ministry have told Zeebiz that the lowest slab for eligibility for Income Tax is likely to be raised to Rs 3 lakh from the present Rs 2.5 lakh. The source also said the tax exemption limit for savings and investments made under Section 80C of the Income Tax Act of 1961 may also be raise to Rs 2 lakh from the present Rs 1.5 lakh.

The proposed tax move would add at least Rs 2,500 more in the hands of more than half a million taxpayers. If this happens, then the government would have to take back the decision during the Interim Budget where it had promosed that individuals with income below Rs 5 lakh would not be taxed.

The decision to raise the Income Tax slab is aimed at boosting the economy by leaving more money in the hands of taxpayers. However, it is yet unclear on how the government plans to offset the reduction in revenue caused by these changes.