Actually, the government can take steps to cut income tax rates due to concerns related to the decrease in consumption in the economy. According to an exclusive report by CNBC, sources said that the government can take special steps in this budget to increase consumption. These include the option of cutting income tax rates and increasing the limit of standard deduction.

Will the government give relief on income tax

If sources are to be believed, the government can increase the limit of income tax exemption up to Rs 50,000 in the budget. At the same time, the limit of standard deduction can be increased to Rs 1 lakh. Currently, this limit is Rs 50,000 in the old tax regime, while in the new tax regime this limit is Rs 75,000. In such a situation, the government can increase it by Rs 25,000 more. Currently, the tax rate on annual income of Rs 12 to 15 lakh is 20 percent.

Taxpayers hope for relief

Taxpayers and experts have high expectations from the budget for the financial year 2025. In fact, this time the government is expected to take several important steps to amend the income tax slab, increase the investment limit and encourage startups. Especially, amid rising inflation and expenses, the demand to make tax rules more simple and flexible to provide relief to the middle class and senior citizens is gaining momentum.

As per the current tax slab, there is no tax on annual income up to ₹2.50 lakh, while 5% tax is levied on income from ₹2.5 lakh to ₹5 lakh, 20% tax is levied on income from ₹5 lakh to ₹10 lakh, and 30% tax is levied on income above ₹10 lakh.

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Income Tax Latest News: There is great news for more than 80 lakh taxpayers of the country. In fact, the Income Tax Department will itself eliminate the pending minor tax demands against about 80 lakh taxpayers and a clear order will be issued giving information about the prescribed procedure for this. Central Board of Direct Taxes (CBDT) Chairman Nitin Gupta gave this information on Friday.

What did CBDT say

The CBDT chief said about this, we will eliminate these tax demands, we will remove such demands from the records of the tax department. The taxpayer does not have to do anything and we will not contact them in any way.

Speaking to PTI after the Budget, Gupta said the process will not be adverse for the taxpayer. But these demands will be put on the e-filing portal of individual taxpayers so that they can also see and if there is any problem in it, the department will resolve it.

He said, if the taxpayer has any issue like rectification in relation to these demands or pending refund case, it will be taken care of. We will bring a clear order regarding this in which everything will become clear. The CBDT chief said the move will benefit around 80 lakh taxpayers. An amount of approximately Rs 3,500 crore is involved in these tax demands.

Let us tell you that earlier, Finance Minister Nirmala Sitharaman had announced to withdraw tax demands up to Rs 25,000 in the interim budget presented in the Parliament on Thursday. He had talked about withdrawal of tax disputes up to Rs 25,000 for financial year 2009-10 and outstanding direct tax demands up to Rs 10,000 for financial year 2010-11 to 2014-15.

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Giving information, the Finance Minister has said that now no tax will be levied on your income. Many such facilities are being provided by the Central Government, taking advantage of which you will not have to pay any tax on that income. A guideline has been issued by the government regarding this.

Which income will not be taxed

Although income up to Rs 2.5 lakh is tax free, but apart from this, there are many such incomes on which you do not have to pay a single rupee tax. Let us tell you which income is your tax free.

Gratuity is not taxed.

If a employed person leaves his company after 5 years in any organization, then he gets the benefit of gratuity. This amount is completely tax free. If we talk about government employees, then their amount up to 20 lakhs is tax free. At the same time, the amount of up to 10 lakhs of private employees is tax free.

There will be no tax on PPF and EPS, apart from this, there is no tax on PPF money. The interest received on this, the amount received on completion of the maturity period, all three are tax free. Along with this, if the employee withdraws his EPF after working continuously for 5 years, then he does not have to pay tax on this amount also.

There will be no tax on such gifts, apart from this, if you have received any family property, cash or jewelry from your parents, then it is exempt from tax. There is no tax on such gifts. If he wants to earn by investing the amount received from his parents, then he will have to pay tax on the income earned from it.

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Soon you will get Form-16 from the office and will have to file ITR by 31st July. But if you are also in tension regarding the tax money, then this news will definitely give you relief. Let us help you in planning for tax saving.

Understand here, how can you save tax?

Before filing ITR, make sure that in which schemes have you invested for your family? Today, from mutual funds to FDs, all investment options are available in the market. Today we talk about your salary and tax. Even if your salary is Rs 12 lakh, even then you do not need to pay Rs 1 tax.

Planning is necessary

To save tax, it is necessary to plan properly. For this, you can also consult an expert. If your company has deducted your tax for any reason, then by filing ITR, you can get back the deducted extra money. On the basis of 12 lakh salary, you come under 30 percent tax under the old tax regime. Actually, there is a liability of 30 percent on the annual income of more than Rs 10 lakh. For those with an annual income of Rs 12 lakh or more, it would be better to opt for the old tax regime. Let’s see the complete calculation…

This is the complete math

1. Every company gives salary to the employees in 2 parts. In a company it is called Part-A and Part-B. Somewhere it is called Part-1 and Part-2. Tax has to be paid on Part-A or Part-1 salary. Usually, on a salary of 12 lakhs, two lakh rupees are kept in Part-B or Part-2. In this way your taxable income has come down to Rs 10 lakh.

2. After this, deduct Rs 50,000 given by the Ministry of Finance as standard deduction. After deducting these, your taxable income comes down to Rs 9.50 lakh.

3. Under Section 80C of Income Tax, you can claim savings of up to Rs 1.5 lakh. In this, you can claim tuition fee, LIC (LIC), PPF (PPF), mutual fund (ELSS), EPF (EPF) or home loan principal etc. Now your taxable income has come down to Rs.8 lakh.

4. Under section 24B of income tax, you get a deduction of two lakh rupees on home loan interest. In this way, your taxable income has come down to Rs.6 lakh here.

5. After this you will have to invest 50 thousand rupees in National Pension System (NPS) under 80CCD (1B) to make the taxable income zero (0). Here the taxable salary has come down to Rs 5.5 lakh per annum.

6. Under Section 80D of Income Tax, you can claim premium for health insurance for children, wife and parents. A premium of up to Rs 25,000 can be claimed for the child and wife. If your parents are senior citizens, you can claim Rs 50,000 as premium. After deducting these two, your taxable income comes down to Rs 4.75 lakh.

There is a 5 percent tax on income from Rs 2.5 lakh to Rs 4.75 lakh. Accordingly, a tax of Rs 11,250 is made on Rs 2.25 lakh. But rebate is given by the Ministry of Finance on tax up to Rs 12500. In this way, your tax liability became zero even on a salary of 12 lakhs.

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Giving information, the Finance Minister has told that now no tax will be levied on your income. The Central Government has told that even a single rupee tax will not be levied on any kind of income. A complete guideline has been issued regarding this.

Will not have to pay tax

Although income up to Rs 2.5 lakh is tax free, but apart from this, there are many such incomes on which you do not have to pay a single rupee tax. Let us tell you which income is your tax free.

Gratuity is not taxed.

If a employed person leaves his company after 5 years in any organization, then he gets the benefit of gratuity. This amount is completely tax free. If we talk about government employees, then their amount up to 20 lakhs is tax free. At the same time, the amount of up to 10 lakhs of private employees is tax free.

There will be no tax on PPF and EPS, apart from this, there is no tax on PPF money. The interest received on this, the amount received on completion of the maturity period, all three are tax free. Along with this, if the employee withdraws his EPF after working continuously for 5 years, then he does not have to pay tax on this amount also.

There will be no tax on such gifts, apart from this, if you have received any family property, cash or jewelry from your parents, then it is exempt from tax. There is no tax on such gifts. If he wants to earn by investing the amount received from his parents, then he will have to pay tax on the income earned from it.

The post Income Tax Update: New guideline released! Now income tax will not have to be paid first appeared on Rightsofemployees.com.