New tax slab proposal for earnings between Rs 5 lakhs to Rs 10 Lakhs likely
New Delhi : Taxpayers who have an earning between Rs 5 lakhs to Rs 10 lakhs are likely to get a big relief from the government as the task force on the Direct Tax Code have suggested a tax rate of 10% for them, said a media report.
Well, it is just a suggestion and it would be noteworthy that a cheer must follow only after the proposal is accepted by the government, who is keen on increasing the tax share.
The report prepared by the task force was submitted last week.
There is no change in the first income-tax slab (up to Rs 2.5 lakh a year), which attracts zero tax. The current second slab (Rs 2.5 lakh to Rs 5 lakh) attracts 5% tax. The task force wants to expand this slab (Rs 2.5 lakh to Rs 10 lakh) and have a 10% tax rate, while retaining the available full tax rebate for those earning up to Rs 5 lakh.
“Effectively, people having income up to Rs 5 lakh will have to pay zero tax. Tax will be charged for income between Rs 5 lakh and Rs 10 lakh at 10% and an individual can save up to about Rs 37,500 a year (at the higher end) under the proposed regime,” an official told a media house on the condition of anonomity.