Middle class will get substantial benefits with slab changes: CBDT Chairperson

Central Board of Direct Tax (CBDT) Chairperson Ravi Agrawal has said that the tax benefit is not confined to income up to ₹12 lakh only and will extend to taxpayers in the other slabs too, benefitting the entire middle class substantially.

“Tax benefit is not confined only to income of ₹12 lakh. The middle class is not only limited till the income of ₹12 lakh. Benefits have been extended across slabs. Till annual income of ₹24 lakh, the tax slab is less than 30%. So, the maximum tax slab does not apply till income of ₹2 lakh per month. Salaried class earning up to ₹2 lakh and above per month will get the benefit of lower tax slab,” Agrawal said during an interaction with Fortune India.

Speaking about the reason behind making income up to ₹12 lakh tax free, Agrawal said it was felt that it would be good if the entire ₹1 lakh is available to the person for purposes other than obligation for tax.

“It makes liquidity available to that extent for expenditure and requirements of family. As per existing slab, tax obligation on income of ₹12 lakh was about ₹80,000, which was a substantial percentage of the annual income. So with that thought in mind the threshold of ₹12 lakh was kept,” said Agrawal.