In a relief provided to the salaried class in Union Budget 2011-12, Finance Minister Pranab Mukherjee on Monday hiked the individual taxpayers’ Income Tax exemption limit from the current Rs 1.60 lakh to Rs 1.80 lakh. This will translate into an annual savings of Rs 2,000 on Income Tax.

The exemption limit for senior citizens has also been increased from the current Rs 2,40,000 to Rs 2,50,000, while senior citizens’ age limit has been reduced from 65 years to 60 years. A very senior citizens category has also been created for people with age 80 years and above and they will get a higher exemption limit of Rs 5 lakh. The exemption limit for women tax payers remains unchanged at Rs 1,90,000.

The tax sop of Rs 20,000 additional investment in infrastructure bonds, which results in a tax saving of Rs 2,000, has also been extended by a year. Pranab however told the Lok Sabha that all other tax rates and slabs for personal income tax would continue to remain same. He said the idea was to make taxes moderate, payment simple, and collection easy.

The Finance Minister also raised the housing loan limit to Rs 25 lakh for priority sector lending. Pranab told the Parliament that the government is also liberalising scheme of interest subversion of 1% on home loan by including loans upto 15 lakh for houses that cost upto Rs 25 lakh. He further announced Rs 3000 crore for Rural Housing Fund.

1 comment:

  1. 80 (c) limit should be increased.That's where most of people get hit. As base salary increases , a substantial (if not all) amount under 1 lakh 80 c limit gets covered with PF , Now a days minimal insurance amount doesn't help. Insurance , ULIp also comes under 80 (C). As if this is not enough, Even home loan part also come under 80 c , So essentially you end up saving very less if you compare to what all you have invested under 80 c. More than 90% of investments by a average indian falls under 80 c . 1 lakh limit on 80c is grossly under par.