Income tax exemption limit likely to be enhanced to Rs 5 lakh in budget

New Delhi: The government is likely to enhance the income tax exemption limit to Rs 5 lakh from the existing Rs 2.5 lakh in the forthcoming budget for 2023-24, sources privy to developments said.

The move, if it fructifies, may leave more disposable income in the hands of consumers. It will also boost consumption, which may also lead to economic recovery, sources said.

As of now, the maximum slab of income which is not chargeable to income tax is Rs 2.5 lakh. For persons in the age bracket of 60-80 years, the exemption limit is Rs 3 lakh and for senior citizens above 80, it is Rs 5 lakh.

The move would also promote investments, sources said further. Finance Minister Nirmala Sitharaman is expected to present the Union budget for 2023-24, on February 1, 2023.