Draft to ease income tax by raising threshold

China's income tax rates for individuals, comprising seven brackets with rates ranging from 3 to 45 percent of income, are expected to be adjusted to lower tax burdens.

For the first time, items deductible from personal tax will include such expenses as the cost of children's education and continuing education, medical fees for major illnesses, interest on housing loans and housing rent.

Zhang Lianqi, a financial expert and Finance Ministry consultant, said the newly added tax deductions will help raise the tax threshold and help in handling rising living costs.

The government would set specific rates for tax deductions in each category, once the draft amendment is approved by the regulatory body, Zhang said.

Yan Yuejin, research director at E-house China R&D Institute, said deductible real estate items are expected to benefit a wide group of residents who either rent or hope to purchase a home, but more measures are needed to make sure such efforts are in line with government pledges to rein in risks in the sector.

Also for the first time, the taxation is expected to cover all personal income, including income from personal services and rewards and royalties writers earn, according to the draft.

In 2017, China's total tax revenue rose by 10.7 percent year-on-year to 14.4 trillion yuan, and tax revenue from individuals went up by 18.6 percent year-on-year to 1.2 trillion yuan, according to the Finance Ministry.