Government may cut personal income tax rates

New Delhi: The Union government is studying several options to bring down personal income tax and a final decision in the matter is expected to be taken by Prime Minister Narendra Modi sometime early next week.

Sources indicate that the Union Finance ministry is considering various options with respect to reduction of personal income tax rates.

Some of these options include slashing tax rates on personal income, in line with the suggestions of the task force on direct tax simplification; rejig of existing tax slabs; and raising the minimum personal income tax exemption limit from the current Rs 2.5 lakh.

In addition, the government is also considering ways to increase tax saving measures, one of which is via the infra bonds route.

The government may allow tax saving via infrastructure bonds of up to Rs 50,000 a year, the sources said.