Union Budget: Expectations on changes in IT slabs and rates

One of the most keenly awaited announcements in the union budget every year is related to personal taxation. In every budget income tax rates and slabs are reviewed. However, the income tax slabs have not been changed since 2014.

Will Finance Minister Nirmala Sitharaman change the slabs and give relief to taxpayers in the budget on Tuesday? The basic personal tax exemption limit was last revised in 2014. Presenting the first budget of Prime Minister Narendra Modi-led government in 2014 the then Finance Minister Arun Jaitley raised the basic income tax exemption limit from Rs 2 lakh to Rs 2.5 lakh. For senior citizens, the exemption limit was increased from Rs 2.5 lakh to Rs 3 lakh. The basic exemption limits have not been changed since then.

Nirmala Sitharaman is set to present her fourth union budget on February 1, 2022. Some analysts feel that the finance minister may announce major relief to taxpayers. The expected relief include an increase in the basic exemption limit from Rs 2.5 lakh to Rs 3 lakh. For senior citizens, it is likely to be increased to Rs 3.5 lakh from the present Rs 3 lakh. The top income slab is also likely to be revised upward from the existing Rs 15 lakh. According to a pre-budget survey conducted among different stakeholders by KPMG recently, the majority (64 per cent) of respondents expect an enhancement in the basic income tax exemption limit of Rs 2.5 lakh.

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