Cheni, Feb 1: In a major relief to the tax-burdened middle-class people, Fince Minister Arun Jaitley on Wednesday proposed to halve the income tax to five per cent for those earning between Rs 250,000 and Rs 500,000 per annum. Presenting the 2017-18 Budget in the Lok Sabha, Jaitley said he proposes to halve the income tax for persons earning between Rs 2.5 lakh-Rs 5 lakh from the current 10 per cent. “This will reduce the tax liability of all persons with incomes below Rs 500,000 either to zero (with rebate) or 50 per cent of their existing liability,” Jaitley said.
The existing benefit of rebate available to the same group of beneficiaries is being reduced to Rs 2,500 that is available only to assessees up to an annual income of Rs 350,000. According to him, the combined effect is that there will be nil tax liability for people with incomes of up to Rs 300,000 per annum. The tax liability will only be Rs 2,500 for people with incomes between Rs 300,000 and Rs 350,000. If the limit of Rs 150,000 under Section 80C for investment is used fully, the tax would be zero for people with incomes of Rs 450,000. While the tax liability of people with incomes of up to Rs 500,000 is being reduced to half, all other categories of taxpayers in the subsequent slabs will also get a uniform benefit of Rs 12,500 per person. (IANS)