Central government is all set to cut the income tax slab from 30 to 25 per cent in the upcoming Union Budget. The 30% IT is for those with income more than Rs 10 lakh per annum. This step targets at increasing direct tax base, like how indirect tax net was improved with Goods and Service Tax (GST). It’s a statistic that out of 125 crore people, only 3 crores file returns. 

       


Though 30 per cent slab is reduced to 25 per cent, a new tax slab can be introduced for direct tax increase. With much new section of people falling in Rs 10 lakh per annum income group, the new tax can affect them. It has been reported that this decision of slab change is a result of discussions between the Prime Minister’s Office (PMO), finance ministry and Niti Aayog team.

 Image result for Budget 2018: IT Slab cut from 30 to 25%

During 2016-17, direct tax was Rs 8.47 lakh crore, and figures for net direct till September 2017 for the 2017-18 was Rs 3.86 lakh crore. Currently there is no income tax on income group of Rs 0 to Rs 2,50,000 per annum, and tax on 2,50,001 to Rs 5,00,000 per annum income category is 5 per cent. Income group Rs 5,00,001 to Rs 10,00,000, has tax of 20 per cent, and income category of Rs 10 lakh and above has 30% tax.

 Image result for Budget 2018: IT Slab cut from 30 to 25%


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