In this, measures like changing the tax slab and increasing the scope of exemption can be taken. When Finance Minister Nirmala Sitharaman will present the country’s budget next week on February 1, most of the eyes will be on the job profession. Taxpayers have been waiting for a new exemption for a long time and there is scope for changes in the income tax slab as well. Experts believe that this time some big announcements can be made regarding taxpayers.

Most of the conversation is taking place regarding the slabs included in the old regime of income tax. At present, up to 2.5 lakhs, a direct tax exemption is available, while income from 2.5 to 5 lakhs is taxed at the rate of 5%. However, it is returned to the taxpayers. That is, earning up to 5 lakhs becomes completely tax free.

But, as soon as your income goes above 5 lakhs, the tax rate on it directly increases four times to 20 percent. Experts estimate that the maximum number of employed people also fall in this slab. If changes are made here, a large number of people will get relief.

What can happen, the rate

expert estimates that this time the government can add a new slab to the old tax regime along with the change in the new regime. This change will be for taxpayers with income ranging from Rs 5 lakh to Rs 7.5 lakh. It is estimated that the tax rate on this income can be reduced to 10 or 15 percent, which is currently 20 percent. It happens that lakhs of salaried taxpayers will get a big help in saving tax.

Relief even on earning more than 10 lakhs!

Income tax experts say that this time the benefit of tax exemption can be availed not only in the 20 per cent bracket, but also those earning more than 10 lakhs. Currently, income above 10 lakh is directly taxed at 30 per cent. It is being speculated that in this bracket, the slab of 30 per cent can be reduced to 25 per cent. Only a few days are left for the budget to come and this time the most awaited is regarding income tax.

Will the tax exemption limit also increase?

Experts also estimate that this time, along with changing the tax slab, the government can also increase the exemption limit on all types of investments. This includes investment schemes like NPS, PPF and ELSS. Tax exemption on PPF and increasing the investment limit to Rs 3 lakh are being speculated, which is currently only Rs 1.5 lakh annually.

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Apart from this, it is expected that the government can also make a big announcement regarding the payment of 18 months’ outstanding DA (DA Arear) of the employees. The employees are constantly demanding their dues. The government had increased the DA to the employees in the month of September.

Let us tell you that the employees’ union has been demanding an increase in the fitment factor in various pay bands for a long time. If reports are to be believed, several rounds of talks have taken place between the government and the concerned departments regarding this.

According to media reports, the government may take a decision to increase the fitment factor after next year’s Union Budget. However, so far no official announcement has been made by the government regarding this.

Demand for increase in fitment factor

At present, fitment factor is being given to central employees (7th Pay Commission) at the rate of 2.57 per cent. There is a demand to increase it to 3.68 times. On increasing the fitment factor from 2.57 to 3.68, the minimum basic pay will increase from Rs 18,000 to Rs 26,000. If the central government accepts this demand, then there will be a tremendous increase in the minimum salary of central employees.

DA was increased by 4 percent

The government had increased the DA of central employees by four percent in September this year. Due to this, the DA of the employees increased from 34 percent to 38 percent. DA is part of the basic salary of the employees. The government gives it to public sector employees as well as pensioners.

The fitment factor was increased in 2016.

Significantly, the last time the fitment factor was increased in the year 2016. The 7th Pay Commission was also implemented in the same year. At that time the minimum salary of the employees went straight from Rs 6000 to Rs 18,000. While the highest level was increased from Rs 90,000 to Rs 2.5 lakh. Now the government can again increase the salary of central employees this year.

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