I wish this were true in FY2008-09 itself...
Ref: Economic TimesThe government is considering a hike in the income-tax exemption limit and a rejig in slabs. North Block is busy making the first drafts of a possible tax restructuring as far as direct taxes go. Corporate taxpayers, too, may be in for some pleasant surprises, as the government is toying with options like lowering of overall tax rate or doing away with surcharge. The political developments, which signal an early election, could have a large bearing on these decisions. Finance minister P Chidambaram also has the elbow room, with direct taxes showing a buoyant growth of over 40%. The tax exemption limit may be raised from Rs 1,10,000 to Rs 1,50,000. The government had hiked the limit by Rs 10,000 in the last budget. But with the price rise in the backdrop and a possible early election, a further increase in the limit could be on the cards, to give some relief to small taxpayers. A demand to raise the exemption limit has come not only from the Left parties, but also some senior leaders within the Congress. The government has already expanded the basket of products eligible for the exemption in this category by bringing in a senior citizen scheme and a five-year post office time account. There is a likelihood of investments in dedicated infrastructure funds or infrastructure bonds enjoying the same status. A rejig in income slabs is also not ruled out. Sources said with the increase in the income-tax exemption limit, a rejig might be on the cards. At present, an income slab of Rs 1,10,000-1,50,000 attracts a tax rate of 10% while a slab of Rs 1,50,001-2,50,000 attracts a tax rate of 20%. Income above Rs 2,50,001 attracts a tax rate of 30%. These slabs may be pushed upwards, with the income slab of Rs 1,50,001 attracting a 10% tax rate and more than Rs 5,00,000 attracting 30% tax rate.
