GUNTUR: Finance Minister Nirmala Sitaraman’s announcements on Income Tax have evoked mixed feelings among the public. Under the new regime of the personal Income Tax rates, she announced that standard deduction for salaried employees has been hiked to Rs 75,000 from Rs 50,000. Similarly, deduction on family pension for pensioners has also been proposed to be enhanced from Rs 15,000 to Rs 25,000.
This, she said, will provide relief to about four crore salaried individuals and pensioners. She also revised the tax rate structure. Responding to the changes, while some employees expressed dissatisfaction over the revised tax slabs, others are content with its inclusiveness.
Explaining the significance of the changes to the standard deduction, Murthy Naidu, a financial analyst, said a hike in the standard deduction in income tax calculations typically refers to an increase in the amount that individuals can deduct from their taxable income without needing to itemize deductions such as mortgage interest, charitable contributions, etc.
It simplifies tax filing for many taxpayers who may not have significant deductions to itemize. Instead of keeping track of various expenses, they can claim a larger standard deduction. By increasing the standard deduction, individuals can reduce their taxable income, potentially lowering their overall tax liability. It benefits a broader range of taxpayers, including those who may not have enough deductible expenses to exceed the previous standard deduction thresholds. However, he added, the exact benefits depend on individual circumstances and specific details of the tax law changes implemented by the government.
Vinay Kumar, a school teacher from Tirupati opined, “We expected the government may raise the income tax exemption limit from Rs 3 lakh to Rs 5 lakh. The Budget proposal includes small benefits, such as revising the tax slab rate from 10% to 5% for individuals with an income of Rs 7 lakh who are not eligible for a tax rebate, and from 15% to 10% for those earning Rs 8 lakh to Rs 9 lakh. However, saving Rs 17,500 annually doesn’t make much difference for us.”
Ramakrishna, headmaster of a government school in Guntur, said, “While the Finance Minister claimed that these incentives will benefit over four crore employees and salaried individuals, our question is what measures have been taken to collect taxes from the remaining working class, industrialists, and other sectors.”
He also suggested that the government should remove slabs and set a certain percentage of total income as tax.
Niranjan, a data analyst from Vizag, seemed to be unaffected. “As per new slabs, there has been no change for taxpayers earning Rs 12 lakh to Rs 15 lakh per annum. We continue to pay 20% tax. Those earning over Rs 15 lakh will be taxed at 30%.”
‘It doesn’t make much difference’
The Budget proposal includes small benefits, such as revising the tax slab rate from 10% to 5% for individuals with an income of Rs 7 lakh who are not eligible for a tax rebate, and from 15% to 10% for those earning Rs 8 lakh to Rs 9 lakh. However, saving Rs 17,500 annually doesn’t make much difference for us,” said Vinay Kumar, a government school teacher from Tirupati