Budget 2011-12 has given a marginal benefit on the tax slab for individuals.
However the benefits for very senior citizens are higher. The expectations that there will be changes in the investment avenues and their slabs have not been met.
PERSONAL INCOME TAX SLABS
The basic exemption limit for income tax has been proposed to be raised to Rs.1.8 lakhs from the current Rs.1.6 lakhs. This leads to savings of Rs.2,000 for all tax payers. Also, for senior citizens the slab has been increased from Rs.2.4 lakhs to Rs.2.5 lakhs.
The slab for women has not been changed from the earlier Rs.1.9 lakhs. Though the finance Minister did not mention this in his Budget Speech, this has been included in the documents submitted along with the budget statement.
For the first time the finance ministry has aligned with other departments and has reduced the age for senior citizens from 65 years to 60 years. Till now the age for senior citizens has been 60 for all departments (think about railway ticket booking, and senior citizens fixed deposit at banks) except the Income Tax Department.
Also the Finance Minister has created a new slab for Very Senior Citizens – for people who are aged eighty years and above. The income tax exemption limit proposed for this group is Rs.5 lakhs.
(For more personal finance stories, you can also visit www.bankbazaar.com)
SAVINGS INSTRUMENTS – NO CHANGES
The Finance Minister has not proposed to change any of the tax savings instruments this year before the DTC gets implemented next year. The investment in infrastructure bonds upto Rs.20,000/- over and above the Rs.1 lakh limit in Section 80C, which was introduced last year, continues for the next year too.
TAX FREE BONDS
The Finance Minister has proposed to allow selected government undertakings to borrow up to Rs.30,000 crores for the development of infrastructure. These borrowings will be in the form of tax free bonds.
Individuals can look to investing in these bonds for tax free returns. The limits set for different government organizations are: Railway Finance Corporation – Rs.10,000 crores; National Highways Authority of India – Rs.10,000 crores; HUDCO – Rs.5,000 crores and Ports – Rs.5,000 crores.
LIMIT FOR SELF ASSESSMENT
For self employed professionals and small business people, the process of doing an audited filing is very time consuming. The Finance Minister has recognized this and has extended the limit of self assessment to Rs.60 lakhs.
This will be a big relief to many professionals and proprietorship companies. To extend the benefit further, the Finance Minister has proposed to forgo the interest penalty on delayed filing of taxes to an extent of 3%.
Though there were many expectations in the personal income tax front from the budget, the Finance Minister has been docile in not changing much. There have not been any significant changes either in the personal income tax slabs or in tax saving avenues.
However introduction of the very senior citizen category and reducing the age for the senior citizens’ slab are welcome measures.
Copyright 2011 BankBazaar.com. All rights reserved.
This tool/content is provided by BankBazaar.com and not by Reuters. The content may not be copied, broadcast, downloaded and stored (in any medium), transmitted, adapted or changed in any way whatsoever without the prior written permission of BankBazaar.com.
BankBazaar.com is an online marketplace where you can instantly get the lowest loan rates, compare and apply online for your personal loan (click here), home loan (click here), car loan (click here), credit card (click here) from India's leading banks and NBFCs.
Trending On Reuters
Construction firm Larsen & Toubro Ltd reported a quarterly profit well below analysts' estimates, as several of its local infrastructure orders were deferred, leading to a decline in domestic business. Full Article