The government is planning to impose a modest income tax on high pensions exceeding Rs 4 lakh per month, reportedly in line with IMF demands. A 2.5% tax may be imposed on such pensions, applicable to all individuals receiving high pensions, including civil, military, and judiciary personnel. The aim is to promote fairness by ensuring high-income individuals contribute to the tax base, similar to others.
In addition to taxing high pensions, the government is considering other changes to the income tax system. The income tax exemption limit for middle-salaried individuals may be increased to Rs 6 lakh per year, and discounts on income tax exemptions are also being explored. Furthermore, incomes above Rs 50,000 per month may be exempt from income tax.
These changes are part of the government’s efforts to reform the tax system and may be included in the upcoming budget. The International Monetary Fund (IMF) has been working with the government to implement economic reforms and stabilize the economy. The proposed changes aim to promote tax fairness and generate revenue for the government.
