I-T exemption limit up

I-T exemption limit up

Women employees, senior citizens also stand to gain

The finance minister proposed to increase the tax exemption limit from Rs 1,50,000 per annum to Rs 1,60,000 for the general category. For women, the exemption limit has been raised by Rs 10,000 to Rs 1,90,000 and for senior citizens, it has been raised by Rs 15,000 to Rs  2,40,000.

In another relief to tax payers, the minister  increased the deduction for maintenance or medical treatment of dependents with disability to Rs 1,00,000 from the present limit of Rs 75,000.

The budget has also abolished the 10 per cent surcharge  levied on individual income tax of over Rs 10 lakh per annum and the education cess on it. With this, a 3.2 per cent reduction in the tax rate would come into effect.

The budget has abolished the fringe benefit tax (FBT), a major irritant for employees and employers. The FBT was imposed in 2005 on the value of certain fringe benefits provided by employers to their employees. Now, most of the perks will be free from tax.
Abolition of FBT will also allow companies to offer company shares under the employee stock option scheme (ESOP) without the employee coming under the tax net at the time of issuance.

Fillip to talent hunt

This will help in retaining and hiring talents by companies without tax irritations.
The ESOPS will be taxable as and when an employee takes home the gain by selling the shares.

Even students have reason to rejoice, as the income tax incentives on the interest paid on education loans have been extended to all fields of study, including vocational studies.

The budget, however, belied the hope of an increase in exemption limit for the interest paid on home loans.

The expectation that the limit will be raised to Rs 2,00,000 from the present Rs 1,50,000 did not materialise. Perhaps, the biggest relief for the middle class people is that the finance minister did not make them poorer by introducing new
taxes.

DH News Service

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