A new income tax slab is likely to be announced soon by the government. It will up the income tax slab from the current 2.5 lakh per annum to 4 lakh per annum. Many media reports confirm the news. However, there is no official announcement or confirmation from the government as yet.
New income tax slabs will look like. Income of Rs 4 lakh to 10 lakh may be taxed at 10% (the current slab is Rs. 2.5-5 lakh taxed at 10%); Rs 10-15 lakh will be taxed at 15% (currently Rs5-10 lakh is taxed at 20%); Rs 15-20 Lakh to be taxed at 20% (Currently Rs 10 lakh and above is taxed at 30%) and a slab where income above Rs 20 lakh will attract a tax of 30%.
A quick summary to the decision
According to a report by News18, after the economic disruption caused by demonetisation, the government may be looking at raising the threshold for paying income tax so that people have more disposable money in their hands.
Indians are cash-dependent, and any interruption, means huge disconnect from their routine. Still; public-at-large was receptive to the news of huge corpus of illegal funds, finally reaching its due. Even when people were standing in queues to access their own money; there was instinctive satisfaction.
However, when the blatant news of cash hoarding and alleged involvement of bank employees started emerging; the public felt betrayed. People were quick to equate that they were being subject to discomfort, while black money was still safe in the coffins of alleged culprits.
There are enough hints for public to smell something fishy going on-in the whole cash system. Even the government is bewildered by the amount deposited in banks till date. It is an open fact that the bank deposits so far, have exceeded the government’s own estimations.
Indian banks witnessed over Rs 11 lakh crore entering into the system till 30 November after the demonetisation exercise kicked off on 8 November, a CNBC-TV18 report said. This means, Rs 11 lakh crore entering into the banking system till 30 November represents 80 percent of the total banned currencies.
However, the news of more disposable income in their hands will bring more cheers to the economy now. It also tells us; there is more action coming from the government.