Ill effects of increasing the tax-free slab of income tax

It was indeed a matter of joy for the public and especially those earning about Rs. 5,00,000/year as their income was tax free from assessment year 2020-2021. Today I wish to review the ill effects of this joy over long term.

Talking to most of clients in the income range of below Rs. 5,00,000, they are no longer interested in investments. Why? Because now they do not need to pay tax. Dear reader, tax benefit through investment is an added advantage and not the sole purpose of investment. We invest for achieving our future goals and with tax benefit we achieve them faster. Increase in income tax limit does not mean there is no need to invest under tax saving options. Rather it means now we have more Rs. 15,000 for investment.

Remember we invest for our goals like Retirement, Children’s education, Foreign trip and much more. We don’t just invest to save tax. So please change your perception and continue with the on-going investment programme.

For guidance on impact of new tax slabs and their impact on your future investments call us on +91-7990290560.

Hardik Baxi

Baxi Investment.