Here is a good news for all the salaried class people, Narendra Modi government is likely to push the Income Tax exemption limit from Rs 2 to Rs 3 lakh which would leave more money in the hands of people. Finance Minister Arun Jaitley is considering the proposal which is likely to be introduced in the Budget sessions which are scheduled from July second week.

In addition to this the government is also examining to bring special tax on the 'Super rich' people. Those earning more than Rs 10 crore per year are likely to rewarded with 35 percent of tax and a wealth tax on host of assets such as expensive paintings. Apart from this Senior Citizens might also get exemption and proposal to reduce the age from 65 to 60 years is being added in the draft of  Direct Taxes Code [DTC].

Currently there are three way tax system, those with an income of less than Rs. 2 lakh a year are exempt from paying taxes. Those earning between Rs 2 lakh and Rs 5 lakh annually are taxed at 10 percent, those between Rs 5 lakh and Rs 10 lakh at 20 percent while anybody earning more than Rs 10 lakh pays a tax of 30 percent.

The Finance Ministry is estimating that this push of tax exemption will lead to consumption of more spending and saving.

(AW: Vamshi)