Five lakhs tax files closed because of tax limit increase

Five lakhs tax files closed because of tax limit increase

Income tax department reports that a large number of files had to be closed down because tax concessions were offered under the new government recently. As a result about 5 lakhs taxpayers were released from paying taxes and because taxes being reduced and limits on pay-as-you-earn scheme was increased, the ministry of finance says that the government would have to forego about Rs. 50,000 crores per month. 

A  senior hand of the finance ministry said that it is hoped that cash circulation among the public would increase as a result of these tax concessions and through it the economy is bound to go up to a level of about 6 per cent. While employees of both government and private sector would be approximately 80 lakhs; of those only about 8 per cent contributed towards tax while earning and as the tax limit increased, a large number of such tax files had to be closed in the process. It is reported that of the 6,50,000 files of those who pay taxes while earning, about 5,20,000 files had to be closed. Though a monthly salary of monthly earnings of over 125,000 was earned, when it was brought under the pay taxes as you earn scheme, the government increased that limit upto 2,50,000. On the other hand the VAT tax was brought down to 8 per cent from 15 per cent.