Some 60 million people will be freed from personal income tax from Thursday as new tax thresholds take effect. Anyone with monthly income of 3,500 yuan ($550) or less will not have to pay tax.

As a result, the number of personal income tax payers will drop from 84 million to 24 million, People's Daily reported.

The rise in the threshold came in June at the calls of the public as the inflation shot up. The previous tax-free threshold of 2,000 yuan had been in force since March 2008.

The threshold change is widely expected to result in an increase in domestic consumption.

By Chen Yingqun