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Tax exemption limit raised to Rs 2.5 lakh

Last updated on: July 10, 2014 23:34 IST

Tax exemption limit under 80C raised to Rs 1.5 lakh

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Salaried class has got something to cheer with Finance Minister Arun Jaitley raising tax exemption limit to Rs 250,000 from Rs 200,000, providing a relief of Rs 5,000.

"I propose not to make any changes in the tax rate. However, with the view to provide relief to small and marginal and senior citizen, I propose to increase the personal income tax exemption limit by Rs 50,000 from Rs 200,000 to Rs 250,000 in case of all individual tax payer who are below the age of 60 years," he said while presenting budget for 2014-15 in the Parliament.

The proposal, according to an estimate, is likely to benefit about two crore tax payers.

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Considering the hike in the basic exemption limit; sops in Section 80 (C); and the revision of interest paid on housing loan; here's the total saving an individual would make in the financial year 2014-15

Tax SlabsTax Saved
Rs 2 - 5 lakhRs 15,450
Rs 5 - 10 lakhRs 25,750
Above Rs 10 lakhRs 36,050

Photographs: Reuters

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Tax exemption limit under 80C raised to Rs 1.5 lakh

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Similarly, he raised tax exemption limit from Rs 250,000 to Rs 300,000 in the case of senior citizens.

"I do not propose to make any change in the rate of surcharge for either for corporates or individual. The education cess for all tax payers shall continue at 3 per cent," he said.

Thus, tax on income from Rs 250,000 to Rs 500,000 is retained at 10 per cent, up to Rs 10 lakh at 20 per cent and above 10 lakh at 30 per cent.

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Income Tax Rates Post Budget 2014-15
INCOMETAX RATE IMPACT
Individual Tax Payers   
 
Up to Rs 2,50,000  NIL 
 
Rs 5,000 
  Savings 
Rs 2,50,001 to Rs 5,00,000  10 per centDo 
Rs 5,00,001 to Rs 10,00,000
20 per centDo 
Above Rs 10,00,000
30 per centDo 
For Senior Citizens - above 60 years  
 
Up to Rs 3,00,000NIL Rs 5,000 
  Savings 
Rs 3,00,001 to Rs 5,00,00010 per cent Do 
Rs 5,00,001 to Rs 10,00,000 20 per centDo 
Above Rs 10,00,00030 per centDo  

Photographs: Uttam Ghosh/Rediff

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Tax exemption limit under 80C raised to Rs 1.5 lakh

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Noting that households are main contributors to savings, he said the investment limit under 80 C has been raised to Rs 150,000 from the existing Rs 100,000 to encourage savings.

Investment in Public Provident Fund up to Rs 150,000 would now be exempt from tax. This was earlier pegged at Rs 100,000.

He also raised tax deduction limit on account of interest of housing loan in case of self occupied property to Rs 200,000 from Rs 150,000.

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Photographs: Uttam Ghosh/Rediff

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