I-T limit raised to Rs 1.8 lakh

I-T limit raised to Rs 1.8 lakh

Finance Minister Pranab Mukherjee on Monday offered respite to people belonging to the low income groups, who have been reeling under rising prices since long, by raising the income-tax (I-T) exemption limit by Rs 20,000.

Presenting the Budget for 2011-12, he proposed to enhance the I-T exemption limit for the general category of tax payers from the existing Rs 1,60,000 to Rs 1,80,000 per annum. This measure will provide a uniform annual tax savings of Rs 2,000 to every taxpayer in this category.

 The Centre also has exempted salary earners having an income of less than Rs 5 lakh from filing tax returns from this year, a Finance Ministry official said. The I-T exemption limit for senior citizens is proposed to be raised from the existing Rs 2,40,000 to Rs 2,50,000. Mukherjee also proposed to reduce the qualifying age for senior citizens from 65 to 60 years to enable them to enjoy the enhanced I-T exemption limit.

He extended the tax bonanza to elderly people by proposing to create a new category of “very senior citizens” of 80 years and above who will be eligible for a higher exemption limit of Rs 5 lakh. However, women got a raw deal, as Mukherjee did not give any tax relief to them keeping their tax exemption limit the same as last year’s cap of Rs 1,90,000.

It is being overwhelmingly felt that in a bid to provide some relief to low income groups, who have been hit hard by the runaway inflation, Mukherjee enhanced the exemption limit even though it appeared to be a token one. On the eve of forthcoming Assembly elections in five major states, Mukherjee seemed to have been driven by political instinct to keep the salaried class happy by giving some tax sops. A hike in the exemption limit was widely expected, as in the Direct Tax Code (DTC) Bill.

The government has already proposed to raise the I-T exemption limit to Rs 2 lakh per annum with effect from April 1, 2012. However, keeping the implementation of the DTC Bill, which seeks to replace the archaic Income-Tax Bill, 1961, from next fiscal, Mukherjee did not make any change in tax rates as well as I-T slabs.