It was the promises made to the “Common Man” which brought this government to power in the year 2004. Over a period of 7 years, it can be said that this government has done virtually nothing sizeable to talk about for individuals. Without further adieu let’s analyse the following points: Rise in Inflation not matched with Raise in Limits In the last decade the Income Tax collection has soared from Rs. 35478 Crore to Rs. 144526 Crore in 2010-2011, resulting into over 400 per cent rise in the collection of personal income tax during the past ten years, by which benchmark, the exemption limit of Rs. 50000 in 2001-02 should have currently been Rs. 2.70lakhs. It has been raised to only Rs. 1.8 lacs. Need for indexation of exemption/deduction Limits It is an irony that the class which pays most suffers most. Looking at the common salaried earner, pays full taxes by way of TDS, is most hard done, as far as the taxation goes in our country. The government facing various state elections, should have cashed in on the opportunity of raising age old limit of exemption for transport allowance, children’s education allowance and medical reimbursement expenses and other exemptions/ deductions for the individual class. New Pension Scheme The government has done well to introduce the new pension scheme, which will help in inducing more savings in the systems. The New Pension Scheme will be effective from 1st April, 2012 and will, accordingly, apply in relation to the assessment year 2012-12 and subsequent years. Some Relief for senior citizens The Government has reduced the retirement age from 65 to 60 years, to align with various retirement age of other public and private sector. This will surely reduce hardship caused to retired individual, who had to pay huge taxes for 5 years, till the time they attain age of 65. The other good thing being done by the government is in providing relief for “Very Senior citizens”, of 80 years and above. The tax saving for individuals pursuant to the exemptions limits provided by the government is shown as below: Assessee —- Existing Tax Slab (In Rs)— New Tax Slab Limit (In Rs)— Tax Saving Male below 60 —– 160000 — 180000 — 2000 Female below 60 —– 190000 — 190000 — 0 Male between 60 to 65 —– 160000 — 250000 — 9000 Female between 60 to 65 —- 190000 —- 250000 — 6000 Male/Female 65 to 80 —— 240000 — 250000 —- 1000 Male/Female 80 & above —– 240000 — 500000 — 26000 The Government has not introduced any significant changes in the age old Income Tax Act, 1961, the thought behind the same would be that the Direct Tax Code (DTC) will be introduced from April 1, 2012. Alok Patnia Founder and Director at Taxmantra.com