The Finance Minister has unveiled the Budget for 2011, applicable for FY 2011-12, subject to appoval by the Parliament. The FM opted against making rampant changes in the direct taxes considering the fact that the Direct Tax Code â€œDTCâ€ will be effective from April 1, 2012. I am of the personal opinion that this budget is a flyover link to the new tax regime â€œDTCâ€ from the present â€œThe Income Tax Act, 1961â€. The key highlights of this budget from the perspective of Individual Taxation as listed as below:
Exemption limit for the general category of individual taxpayers enhanced from Rs. 160,000 to Rs. 180,000 giving uniform tax relief of Rs. 2,000 to each Individuals. This is a welcome move by the government considering the intense pressure of inflation on common man.
Further, there is no change in the basic exemption limit of female of Rs. 190,000, considering the fact that in the DTC regime, the basic exemption limit for male and female is proposed to be kept same.
Exemption limit enhanced and qualifying age reduced for senior citizens– This budget has given dual bonanza to senior citizens. The basic exemption limit of senior citizen has been enhanced from 2.40 Lacs to 2.5 Lacs. Further, the qualifying age for senior citizen has been brought down to 60 years from 65 years.
Further, a new tax slab category â€œVery Senior Citizensâ€ for assessees of 80 years and above has been created, wherein they will get a basic exemption limit of Rs. 5 Lacs.
Additional deduction of Rs. 20,000 for investment in long-term infrastructure bonds under section 80CCF has been proposed to be extended for one more year that is till March 2012.
The government has put more emphasis in this budget on macro economy and also public expenditure front, in the view of upcoming state elections. The government has also opted against making rampant changes in this budget considering the fact that the DTC will replace the current legislation from April 1, 2012.
Founder and Director at www.taxmantra.com