• Notification Date: 22-01-2022
• Notification No: N/A

The Income Tax Exemption Limit is Expected to Increase in the New Budget

The Finance Minister is about to declare the new Union Budget for FY23 on 1 February. There is a major expectation among the taxpayers that the income tax exemption limit is about to increase. A survey by KPMG has proved that 64% of the respondents expect the tax exemption to increase. The respondents expect the income tax limit of 2.5 lakh rupees to raise. They support the upward revision in the top slab of income of INR 10 lakhs and more. They expect an increase in the existing deduction limit of Rs.1.5 lakh under Section 80C.

Indian branches of foreign companies are subjected to 40% of corporate tax. The gap between the rates applicable to foreign companies and domestic companies has increased due to the reduction in headline corporate tax for domestic companies from 30% to 22% from the financial year 2019-20. It is highly necessary to reduce the tax rate applicable to the Indian branches so that India can maintain a globally competitive investment jurisdiction.  

The survey has shown the public’s support for the government’s Production Linked Incentive Scheme (PLI) that is applicable for the telecom, pharmaceuticals, steel, textiles, food processing, white goods, IT hardware, and solar sectors. 83% of the respondents supported an expansion of this scheme to cover other sectors. This would help India to become a key manufacturing hub.