New Delhi: Finance Minister Pranab Mukherjee Friday proposed to increase the tax exemption limit for individual taxpayers to Rs 200,000, as against Rs 180,000 allowed for exemption in fiscal 2011-12.
Under the new tax slabs, income between Rs 200,000 and Rs 500,000 will attract 10% tax. The Finance Minister, while presenting the budget for the fiscal year 2012-13, raised the tax limit to Rs 10, 00,000 under the 20% slab. Earlier, the tax limit under the slab was at Rs 800,000. Now, 20% tax will be charged on income above Rs 500,000 and up to Rs 10,00,000.
Earnings above Rs 10,00,000 will be taxed at the rate of 30%.
The finance minister, however, kept the slabs and tax rates unchanged for senior citizens (60 and 80 years of age) and very senior citizens (80 years and above), but proposed that senior citizens not having income from business don't pay advance tax.
The exemption limit for senior citizens will continue to be Rs 250,000; 10% tax will be charged on income between Rs 250,000-500,000, 20% between Rs 500,000-10,00,000 and 30% above Rs 10,00,000.
For very senior citizens, the income tax exemption limit will remain same at Rs 500,000; 20% will be levied on income between Rs 500,000-10,00,000 and 30% for above Rs 10,00,000.
Additionally, a deduction of up to Rs 10,000 has now been made available for interest from savings bank account.
Also, a deduction of up to Rs 5000 has been allowed for preventive health check-up, within the existing limit for deduction allowed for health insurance which is Rs 15,000 for individuals.