Even though the income tax rebate limit and standard deduction available under the new tax regime has been hiked with effect from April 1, employers are unlikely to change the salary structure.
During her Budget speech on February 1, Finance Minister Nirmala Sitharaman increased the income tax rebate limit available under the new tax regime to Rs 7 lakh. This means that under the new tax regime, come April 1, you will not have to pay tax for income up to Rs 7 lakh.
At present, those with income up to Rs 5 lakh are exempt from paying income tax under both the old and the new regime. Since the enhancement of the tax rebate limit, there has been much speculation about changes in the salary structure of employees across sectors.
However, industry experts have played down such concerns.
“I do not believe companies will tweak the pay structure of employees owing to the increase in tax rebate,” Balasubramanian A, VP and Business Head of staffing major TeamLease Services, told Moneycontrol.
Source: Moneycontrol