Union Budget : Jaitley Likely To Raise Income Tax Slabs

Union Finance Minister Arun Jaitley is likely to provide some relief to the middle-class citizens by raising Income Tax slabs at this year’s Union Budget which will be announced in the Parliament next Monday, February 29.

The current lowest income-tax slab stands at Rs. 2.5 lakhs. It is likely to get increased to Rs. 3 lakh which means income up to Rs 3 lakh is likely to be exempt from Income Tax. There are also indications that even the higher IT slabs may be re-organized.

The government is also likely to enhance bank recapitalization from Rs 25,000 crore to Rs 30,000 crore. This comes in the background of news that 29 state-owned banks have written off a total of Rs 1.14 lakh crore of bad debts between financial years 2013 and 2015. Surprisingly, despite the big salary bill caused by the Seventh Pay Commission recommendations, the centre is optimistic of a fiscal deficit target of 3.5per cent.

RBI Governor Raghuram Rajan and Finance Minister P Chidambaram are strongly in favor of sticking to fiscal deficit targets.

The government expects that spectrum auctions in the next financial year will provide the necessary leg-room for such a step. The outgo from the Pay Commission recommendations is also likely to get cut-down by Rs 15-25 thousand crore from the present 74,000 crore.

A prominent member of Bharatiya Janata Party (BJP), 63-year-old Arun Jaitley is the current Minister of Finance, Minister of Corporate affairs and Minister of Information and Broadcasting.