Interim budget may raise I-T rebate to 27.5 lakh

The aim is to give tax relief to middle class ahead of the general election

The interim budget on February 1 is likely to increase the tax rebate under the new personal income tax regime, two people close to the discussions said, giving relief for the middle class ahead of the approaching general election.

The plan is to raise the tax rebate, which is now available for income up to 27 lakh, to about 27.5 lakh under the new regime, the people said on the condition of anonymity.

Tax rebate eligibility is calculated on the net income after taking into account standard deduction of ₹50,000. Accordingly, a person with income of 27.5 lakh, after accounting for the standard deduction, will not have to pay any income tax from 2024-25 onwards, according to the proposal under discussion.