Not 10 but 5 percent tax for individuals earning between Rs. 2.5 lakh to Rs. 5 lakh

New Delhi [India], Feb.1 (ANI): Giving details of proposals on personal income tax, Finance Minister Arun Jaitley said on Tuesday while presenting his fourth budget, that the existing rate of taxation for individual assesses between income of Rs. 2.5 lakh to Rs. 5 lakh will be reduced to five percent from the present rate of 10 percent. He said this would reduce the tax liability of all persons below Rs. 5 lakh income either to zero (with rebate) or 50 percent of their existing liability. In order not to have duplication of benefit, the existing benefit of rebate available to the same group of beneficiaries is being reduced to Rs. 2500 available only to assesses up to income of Rs. 3.5 lakh, he added. "The combined effect of both these measures will mean that there would be zero tax liability for people getting income up to Rs. 3 lakh per annum. And the tax liability will only be Rs. 2500 for people with income between Rs. 3 and 3.5 lakh," Jaitley said. He added, "If the limit of Rs. 1.5 lakh under Section 80C for investment is used fully the tax would be zero for people with income of Rs. 4.5 lakh. While the taxation liability of people with income up to Rs. 5 lakhs is being reduced to half, all the other categories of tax payers in the subsequent slabs will also get a uniform benefit of Rs. 12500 per person. The total amount of tax forgone on account of this measure is Rs. 15500 crore." He further stated that a surcharge of 10 percent of tax payable on categories of individuals whose annual taxable income is between Rs. 50 lakh and one crore, will be levied. The existing surcharge of 15 percent of tax on people earning more than 1 crore will continue. This is likely to give additional revenue of Rs. 2700 crore. A simple one page form to be filed as income tax return will be made for the category of Individual having taxable income up to Rs. 5 lakh other than business income. He added that a person of this category to file Income Tax Return for the first time would not be subjected to any scrutiny in the first year unless there is specific information available with the Department regarding his high value transactions. Jaitley appealed to all citizens of India to contribute to Nation Building by making a small payment of 5% tax if their income is falling in the lowest slab of Rs. 2.5 lakh to Rs. 5 lakh. The Finance Minister further announced that in line with exemption available to the Prime Minister's Relief Fund and certain other funds, the income of the Chief Minister's Relief Fund or the Lieutenant Governor's Relief Fund shall be exempted from tax. (ANI)