Various proposals announced in the interim Budget to ease tax burden on salaried class and home-owners are welcome and will go a long way to help the small taxpayers as well as passive income earners such as senior citizens, according to tax analysts.
They said the increased spending capacity with consumers would boost various sectors of the economy.
“This [the tax relief measures] is bound to aid consumption across all consumer categories, especially ‘essentials’ in home and personal care, food and refreshment, thereby providing an impetus to the FMCG and services sectors,” said Harsha Razdan, Partner and Head, Consumer Markets, KPMG in India. “In summary, the interim Budget has been around the consumer, consumption and measures around rekindling the investment cycle.”
“Raising the TDS threshold for interest and rental income should be a welcome to passive income earners such as senior citizens,” said Rahul Garg, Senior Partner - Tax & Regulatory, PwC India.
“Those having taxable income not exceeding ₹5 lakh will no longer need to pay any tax,” said Kuldip Kumar, Partner and Leader Personal Tax, PwC. “Those who are having income more than ₹5 lakh but their taxable income after these deductions falls to ₹5 lakh will also not pay any tax.”
The government also announced the electronic assessment of Income Tax returns, which, experts said, was a step towards improving governance and reducing the complexity in the tax system.
“Anonymous electronic assessment is novel and augurs well for the road to minimum government and maximum governance,” Mr. Garg added. “Sustained efforts to enhance the tax base by reducing complexity and moderating rates seem to yield result as the Finance Minister points out in number of return filers increasing from 3.79 crore to 6.85 crore. The interim Budget has kept to the theme of being good to the lower and middle income strata.”