Budget 2023-24: On February 1, 2022, Finance Minister Nirmala Sitharaman presented the fourth budget of the Modi government. Since then, a lot has happened in the country and the world, which has a direct impact on the pocket of the common man.
Only 23 days after the presentation of the budget, Russia attacked Ukraine and the war that started between the two countries is still going on. But this war put the whole world in trouble. There was a huge jump in the prices of all other commodities including crude oil. The prices of food and drink skyrocketed, especially wheat and edible oil. And its effect was also seen in India.
In April 2022, the retail inflation rate reached 7.79 percent. And after that remained above 7 percent for several months. From petrol diesel to cooking gas and PNG-CNG became expensive. After the rise in the inflation rate, the Reserve Bank of India started making loans expensive, then the EMI of the people became expensive. Firstly, the common man was troubled by inflation, on top of that the banks made the EMI expensive 5-6 times. Due to which the budget of every household has deteriorated.
In such a situation, the eyes of the taxpayers are on the fifth budget of the second term of the Modi government. The question arises whether the Modi government will give relief to the taxpayers by reducing the tax rate.
There is no benefit of tax rebate on income above 5 lakhs.
During the meeting with the stakeholders regarding the budget, the stakeholders have demanded the Finance Minister to reduce the tax burden on common taxpayers and rationalize it. At present, no tax has to be paid on income up to Rs 2.50 lakh. But 5% tax has to be paid on income from Rs 2.50 to Rs 5 lakh.
Those whose income is less than Rs 5 lakh, the government gives tax rebate of up to Rs 12,500 under rule 87A. That is, those with taxable income less than Rs 5 lakh do not have to pay any tax. But if the taxable income of a taxpayer is more than Rs 5 lakh and less than Rs 10 lakh, then he has to pay 20% tax directly. Such people do not even get the benefit of Rs 12,500 tax rebate under 87A. And 20 percent tax has to be paid on income above 5 lakhs and 30 percent tax on income above 10 lakhs.
Relief to corporate, burden on taxpayers!
For example, if a taxpayer’s taxable income is Rs 7 lakh, then he has to pay tax of Rs 52,500, and if someone’s taxable income is Rs 12 lakh, he has to pay tax of Rs 1,72,500. Actually taxpayers have to pay 20% tax directly after 5%. There is no middle tax slab of 10 per cent. That’s why there is a demand to rationalize the tax slabs. The government has reduced the corporate rates in 2019 but has not given any relief to the common taxpayers. While taxpayers have had to face inflation since the Corona period in the last few years.
Chances of reduction in tax slab rate!
In such a situation, taxpayers want the government to change the tax slab rate. It is not at all fair to collect 20% income tax directly after 5%. Tax experts are demanding to increase the income tax exemption limit from Rs 2.50 lakh to Rs 5 lakh and to impose 10% tax on income between Rs 5 to 10 lakh. Anyway, this is the last full budget of the Modi government before the Lok Sabha elections, in such a way taxpayers hope that the Modi government will not disappoint them.
