Budget 2011 – Enhanced exemption limit, reduction in qualifying age for senior citizen, 5 Lacs exemption for very senior citizens

Budget 2011 brings most benefits to the senior citizen class. The basic exemption limit for senior citizens has been enhanced from Rs. 2,40,000 to Rs. 2,50,000 and the minimum age for qualifying as ‘senior citizen’ has been cut down to 60 years from existing 65 years. The budget has granted dual bonanza to the senior citizens. This move will bring in uniformity as in most of the PSU and other institutions the retirement age is 60 years.

FM also announced a new tax category of people having age of 80 years or more as ‘very senior citizen’. The maximum exemption limit in such case is proposed to be Rs. 500,000. The new exemption limits will be applicable for calculating income tax for financial year 2011-2012.

Reduction in the age of senior citizens and the new very senior citizen category are good proposals for individual income tax in the budget 2011.

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