NEW DELHI: Unconfirmed media reports claim the government might be looking to revise tax slabs and increase income tax exemption limit from the current `2.5 lakh to `4 lakh.
The move, according to financial news website Moneycontrol, is part of the broader strategy to reward honest taxpayers who have endured the pain of demonetisation.
However, news agency ANI quoted government spokesperson Frank Noronha as saying the reports were ‘baseless and unfounded’. An overhaul of the tax slabs, if implemented, would put more disposable income in the hands of people.
This, according to experts, would boost spending and consumption, which has taken a severe beating after the note ban. Currently, there are three tax slabs in the system at 10, 20 and 30 per cent and annual earnings below `2.5 lakh are exempt from income tax. Meanwhile, Finance Minister Arun Jaitley said that small businessmen and workshop owners, with annual turnover of less than `2 crore, would be taxed lesser if they accept digital payments.