New Delhi: In a minor relief to the individual tax payers, the Narendra Modi government in its maiden Union Budget raised the income tax exemption slab from Rs 2 lakh to Rs 2.5 lakh.
"I propose not to make any changes in the tax rate. However, with the view to provide relief to small and marginal and senior citizen, I propose to increase the personal income tax exemption limit by Rs 50,000 from Rs 2 lakh to Rs 2.50 lakh in case of all individual tax payer who are below the ago of 60 years," he said while presenting budget for 2014-15 in the Parliament.
The proposal, according to an estimate, is likely to be benefit about 2 crore tax payers.
Similarly, he raised tax exemption limit from Rs 2.5 lakh to Rs 3 lakh in the case of senior citizens.
"I do not propose to make any change in the rate of surcharge for either for corporates or individual. The education cess for all tax payers shall continue at 3 per cent," he said.
Thus, tax on income from Rs 2.5 lakh to Rs 5 lakh is retained at 10 per cent, up to Rs 10 lakh at 20 per cent and above 10 lakh at 30 per cent.
Noting that households are main contributors to savings, he said the investment limit under 80 C has been raised to Rs 1.5 lakh from the existing Rs 1 lakh to encourage savings. Investment in Public Provident Fund up to Rs 1.5 lakh would now be exempt from tax. This was earlier pegged at Rs 1 lakh.
Presently the investments and expenditures up to a combined limit of Rs 1 lakh get exemptions under Sections 80C, 80CC and 80CCC of the Income-Tax Act.
He also raised tax deduction limit on account of interest of housing loan in case of self occupied property to Rs 2 lakh from Rs 1.5 lakh.
In some relief to those aspiring to take home loans, the housing loan interest exemption has been increased to Rs 2 lakh from Rs 1.5 lakh.
(With inputs from PTI)
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