Union budget 2011 does not provide any respite from the inflation to the common man. There is not much relief to the individual for which they were looking for. The budget announced slight changes in the basic exemption limit for individual men and senior citizen but also imposes additional service tax on some items and also nominal central excise duty of 1 per cent imposed on 130 items entering in the tax net, which will definitely affect the purchasing power of the ‘aam aadmi’.

On income tax part, as the Direct Tax Code (DTC) will come into force from 1^st April 2012, the budget seems to be a step towards the implementation of the same. Keeping the implementation of DTC in mind, there is no relief for women taxpayers, as the DTC proposes the maximum limit of Rs. 2,00,000 which is same for both men and women assesses eliminating the gender discrimination.

The limit for men assesses has raised from 1,60,000 to Rs. 1,80,000 and for women it remains same from the last year at Rs. 1,90,000.  Senior citizen will get additional benefit of Rs. 10,000 as exemption limit i.e, the limit raised from Rs. 2,40,000 to Rs. 2,50,000. Further, the qualifying age limit of senior citizen is reduced to 60 years from 65 years. Budget introduced a new category of taxpayer ‘very senior citizen’ having age of 80 years or more with maximum exemption limit of Rs. 5,00,000. This budget bring most benefits to the senior citizen assesses.

Further, Additional deduction of Rs. 20,000 for investment in long-term infrastructure bonds u/s 80CCF has been proposed to be extended for one more year and it is continue to be applicable for financial year 2011-12.  Salaried Individual having salary upto Rs. 5 Lacs (not yet confirmed via notification) having no other income except salary income would be exempt from filing of return of income/ Income Tax Returns, where the tax liability is fully deducted by their employers.

It is also proposed to amend the section 80CCE so as to provide that the contribution made by Central Government or any other employer to a pension scheme u/s 80CCD(2) shall be excluded from the limit of Rs. 1,00,000 provided u/s 80CCE. Employees can claim additional deduction u/s 80CCD for any such contribution made over and above the limit of Rs. 1,00,000 u/s 80CCE.

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