Budget 2011-12 has given a marginal benefit on the tax slab for individuals. However the benefits for very senior citizens are higher. However the expectations that there will be changes in the investment avenues and their slabs have not been met.
Personal Income Tax Slabs
The basic slab for income tax has been proposed to be raised to Rs.1.8 lakhs from the current Rs.1.6 lakhs. This leads to a savings of Rs.2000 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.
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 upto 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%.
Concluding Remarks
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.
IF ONLY SOMEBODY HAD THE GUTS TO REDUCE CORPORATE TAX DOWN TO A REASONABLE 20%.
THE ECONOMY WILL GET A BOOST AND TAX COMPLIANCE,TAX BASE,BOTH WILL SET RECORD FIGURES!
WITH THE ENORMOUS RISKS THAT BUSINESSES TAKE 20% IS JUST FIGURE.DO NOT TELL US THAT EUROPE, AND USA ALSO HAVE HIGHER RATES! WE HAVE A GIGANTIC TAX BASE WHICH IS AS YET UNSEEN!
BE BOLD! COME OUT AND DO WHAT OTHERS HAVE NOT DARED TO DO!
Minister Pranab Mukherjee has made individuals happy by raising the tax exemption limit to Rs 1.8 lakh.
Since the age limit for senior citizens is rightly reduced to 60 years, for the definition of very senior citizens, it should be 70 years, or at the maximum, 75 years.
After all how many very senior citizens with Taxable income are there in the country? Therefore superficially exemption of Rs 5.00 lakhs sounds to be a great offer, but in practice, beneficiaries will be minimal!
IMMENSE DISAPPOINTMENT FOR HONEST LADY TAX PAYERS, BY NOT INCREASING CEILING ENCHANCEMENT IN RESPECT OF LADY EMPLOYEES . .WOULD HAVE ENHANCED ATLEST BY 10000/. 90% OF THE HOUSES ARE ACTUALLY MANAGED BY LADIES OF MIDDLE CLASES. DID NOT EXPECTED SUCH A THING BY OUR B ELOVED AND AND EXPERIENCED FINANCE MINISTER.
this is nice sri
TAX ON MEDICAL REIMBURSEMENT BEYOND RS 15000/- SHOULD HAVE BEEN CHANGED AS NOW A DAYS Rs 15000/- MEDICAL EXPENDITURE IS NOTHING KEEPING IN VIEW HIGH COST OF ALL MEDICINE AND DOCTOR CONSULATION FEE. SPECIALLY FOR INDIVIDUALS WHO ARE PAYING FOR THEIR OLD PARENTS. I HOPE FM LOOKS INTO THIS IF U CAN PASS
K K SHARMA
DELHI
nice
Very disappointing budget for salaried class, FM does not want that new generation should think about saving in the future. So the future of youths is very dark.
In saving instrument ceiling is 1.0 Lakh(If you add your child school fees + PF + Principal of housing loan) is not enough, as there is no scope to save any for tax benefiet. It will be difficult to service once retired from Job because you do not have any income by that time and only saving is your PF. How long you can survive.
can't see any additional benefits on agriculture development this year
Women have been deprived from getting any benefit this year. Finance Minister's budget did not consider women i guess.