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For an individual earning Rs 20 lakh a year, the abolition of 10 per cent surcharge will lower the tax burden by Rs 4,420 a month (see chart above).
Finance Minister Pranab Mukherjee today kickstarted the phasing out of surcharges by letting high-income individuals be the first beneficiaries. This, officials said, will cut collections by Rs 6,000 crore.
Tax experts said the effect of doing away with the surcharge will be 10.3 per cent for the above Rs 10-lakh-income group since the education cess of 3 per cent on the surcharge will also go.
The hike in exemption limit for senior citizens by Rs 15,000, for women and all salaried taxpayers by Rs 10,000 will cost the exchequer another Rs 4,000 crore. In other words, by doing away the surcharge and increasing the exemption limit, Mukherjee has imparted a Rs 10,000 crore stimulus.
High-income individuals have more than one reason to smile. The Budget has doubled the threshold limit at which the wealth tax of 1 per cent kicks in. After 17 years, the threshold limit has been increased to Rs 30 lakh from 15 lakh. Wealth in excess of Rs 30 lakh will lower wealth tax by at least Rs15,000.
Women, for whom Mukherjee has hiked the threshold I-T exemption limit to Rs 1.9 lakh, will make substantial savings if they are in the higher income bracket. The tax burden of senior citizens will be at least Rs 1,500 less, whereas for all individual taxpayers, it will be lower by a minimum Rs 1,000.
The trap for salaried professionals lies in the way fringe benefit tax has been shifted from the employer to the employee. The gains from employee stock option plans (ESOPs) will now be taxable at the employee end. The contribution by employers to approved retirement funds in excess of Rs 1 lakh will be taxed at the hands of employees, resulting in an increase in their tax outgo.
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Rs. 10000/- increase in tax exemption is peanuts. By removing surcharge, the top bureaucrats ensured that they got more tax benefits than the lower and middle level employees. IAS zindabad!
Giving relief to individual taxpayers, the government raised the income tax exemption limit by Rs 10,000 for general taxpayers,and income of up to Rs 1.6 lakh per annum for men and Rs 1.90 lakh per annum for women is tax-exempt FM may kindly consider the exemption 1.75 lakhs for men, 2 lakhs for women and saving limit to Rs.1.5 lakhs.
FM has raised income tax limit by 10,000/- fo general man, which comes out to be Rs 1030/- Per Annum or merely 86 Rupees per month. No More he can give because our Bueucrats
I feel helpless as Congress government did nothing to salaried employees. Increasing the Tax exemption limit by 10,000 is not sufficient. I think Congress should be thrown out of the power in the next election as we always pay tax and with our tax, he will give the waiver to others which is unacceptable and Congress should have to pay heavy price. Congress should go out
The exemption limit for salaried employees is not raised as per expectations.The savings limit of Rs.1 lakhs was also not been considered for increase.FM may kindly consider these two things and increase atleast Rs.25,000/- for exemption limit and Rs.1.50 lakhs for saving limit.
Looking to high pocket cost I Tx exemtion shoud b 300000. ForGovt employee Stanard deduction shoud b Rs 50000.
I feel securities transaction tax could have increased. This is the time when government is also in need of funds just like any of the individuals or corporate. STT have generated enormous fund in the government kitty in the last few years and it is one of the most efficient method to collect taxes. The fund generated through STT and now forgone STT could have used in something more needy. Similarly indian IT industry is now mature enough to stand on its own. Today IT industry is refered to as cream industry. So fund from here can be transfered to rural areas where people are even deprived of basic amenities.