As of now, income upto Rs 2.5 lakh is exempted from income tax. Rs 1.5 lakh limit is granted under Section 80 C. It was reported earlier that the government may increase the limit under 80 C to Rs 2 lakh.The Central government may offer benefits to middle class taxpayers in the upcoming budget, which will be its last before 2019 general elections. Reports said that the government has already begun discussions on a package; however, nothing will be announced before weighing the cost of tax breaks on the exchequer. The benefits may include an increase in tax exemption limit and additional exemption under Section 80 C.
Though Finance Minister Arun Jaitley has been an advocate of giving more liquidity to the masses to spend and invest, given the revenue short-fall, he will have to carefully check government's account books before announcing additional benefits.
TOI reported that a section in the government was backing the re-introduction of long term capital gains tax on stock market transactions. The tax will be levied on transactions above a certain value. The money might go in welfare schemes. The Bombay Stock Exchange (BSE) reportedly had a meeting with finance ministry official and recommended to levy the tax.
The report further said that the tax package decision will be taken after detailed talks with Arun Jaitley. The move will taken in such a way that it doesn't affect government's flagship schemes or deplete the revenue stream majorly.
As of now, income upto Rs 2.5 lakh is exempted from income tax. Rs 1.5 lakh limit is granted under Section 80 C. It was reported earlier that the government may increase the limit under 80 C to Rs 2 lakh..