Government to examine Rs.5 lakh tax exemption proposal for pensioners
The finance ministry has informed Congress MP Shashi Tharoor that his suggestion to increase the tax exemption limit for pension up to Rs 5 lakh would be examined during the ongoing preparations for the Union Budget 2018, according to a communication.
Responding to a letter written by Tharoor in late September, Minister of State for Finance Shiv Pratap Shukla said the suggestion that pension up to Rs 5 lakh per annum should be exempted from income tax in all cases was examined.
“The proposal would be examined during the exercise for the ensuing Union Budget 2018 and the outcome would be reflected in the Finance Bill, 2018,” said the letter, which was tweeted by Tharoor.
The letter, dated November 14, said that a pensioner who is above 80 years is not required to pay tax if the total income, including pension, does not exceed Rs 5 lakh.
“The suggestion that pension up to Rs 5 lakh per annum should be exempt in all cases would require amendment to the existing provisions of the Income Tax Act, 1961,” the letter said.
A pensioner, who is a senior citizen – aged 60 to 80 years – is exempt from income tax if the income, including from pension, does not exceed Rs 3 lakh.
About the letter, Tharoor tweeted, “Govt’s semi- encouraging reply to my request to exempt pensioners from tax on the first 5 lakhs of income. Hope @arunjaitley will include this in his next budget”.
The work for preparation of the General Budget has already commenced and Finance Minister Arun Jaitley is likely to present it to Parliament in the first week of February.
Source: Indian Express