Tax highlights: I-T limit raised to Rs 1.8 lakh
Finance Minister Pranab Mukherjee on Monday proposed to raise the income tax exemption limit for general tax payers to Rs 1.80 lakh per annum from Rs 1.60 lakh at present and introduced a high new tax slab for senior citizens of 80 years and above.
Unveiling the Budget proposals for 2011-12 in the Lok Sabha, he also proposed to reduce the age limit for consideration as senior citizens from 65 years to 60.
Senior citizens will get tax exemption for income up to Rs 2.5 lakh, higher from Rs 2.4 lakh now.
As per the announcement, the increase in the income tax exemption limit for general tax payers (excluding women and senior citizens) to Rs 1.8 lakh per annum would translate into a benefit of Rs 2,000 for all tax payers.
At present, the general tax payers earning more than Rs 1.6 lakhs per annum are required to pay income tax.
Introducing a new tax slab for very senior citizens (80 years and above), Mukherjee said, they will not have to pay any tax for annual income up to Rs 5 lakh.
Goods and services tax bill in budget session: Pranab
Higher tax exemption limit for individuals, significant benefits for senior citizens, retention of service tax at 10 per cent and withdrawal of some duty exemptions were some of the major tax-related highlights of the Budget 2011-12 presented by Finance Minister Pranab Mukherjee on Monday.
Here are some major announcements:
*Tax exemption limit raised to Rs 1.8 lakh, from Rs 1.60 lakh for individual tax papers.
*For senior citizens, the qualifying age reduced to 60 years and exemption limit raised to Rs 2.50 lakh.
*Citizens over 80 years to have exemption limit of Rs 5 lakh.
*Surcharge for companies cut to 5 per cent, from 7.5 per cent.
* A new revised income tax return form 'Sugam' to be introduced for small tax papers.
*Service tax retained at 10 per cent; duty exemptions to be withdrawn on various items.
*Net loss from direct tax proposals estimated at Rs 11,500 crore for the year.
*Excise and customs duty proposals to result in the net gain of Rs 7,300 crore.
*Standard rate of central exercise duty maintained at 10 per cent; No change in CENVAT rates.
*Nominal one per cent central excise duty on 130 items entering the tax net. Basic food and fuel and precious stones, gold and silver jewellery will be exempted.
*Peak rate of customs duty maintained at 10 per cent in view of the global economic situation.
*Basic customs duty on agricultural machinery reduced to 4.5 per cent from 5 per cent.
*Service tax widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests.
*Service tax on air travel increased by Rs 50 for domestic travel and Rs 250 for international travel in economy class. On higher classes, it will be ten per cent flat.