Enhancement in standard deduction: The first major announcement is enhancing of the standard deduction admissible under section 16 of the IT Act for the tax payers having salary income up to Rs 100000. The outer limit of Rs 20000 has been enhanced to Rs 25000 simultaneously. He has announced that no benefit of standard deduction shall be admissible to person having a salary of more than Rs 5 lakh per annm.

Higher basic exemption limit of taxable income: Another major benevolent measure announced by the FM is raising of the basic exemption limit from Rs 40000 to Rs 50000. Even though it offers only a marginal relief, in real terms it will affect a large number of tax payers.

Raising of limit ofmedical expenses: With the rising cost of medical expenses, the FM has rightly increased the limit of reimbursement of medical expenses from Rs 10000 to Rs 15000.

Increase of deduction from house property: In respect of house property income a straight deduction of 1/5th as repairs is allowed. Now the deduction has been raised to 1/4th of the annual letting value. Further in respect of self-occupied property the amount of deduction in respect of interest has been raised from Rs 15000 to Rs 30000. It has further been announced by the FM that in case of loss in respect of house property in case of salaried tax payer the loss will be allowed to be taken into account while determining the tax of the tax payer under section 192 of the IT Act. The measure would give impetus to house buildings activity in the country and encourage increased construction of house property for self occupation.

Measure to widen the tax base: One of the possible ways by which a large number of persons can bebrought under the tax net is to identify potential tax payer though certain economic indicators as tried in the earlier stipulation which could not be successfully implemented. Now a further step towards implementation of the two new economic indicators have been identified along with the existing four economic indicator. That is: having a credit card; membership of posh club. Also it has been provided that if a person fulfils any one of the above six economic indicators than he will have to mandatorily file a return of income even though he may not be having a taxable income as per income tax law. The measure will be introduced twenty three more cities in this year.

PAN obligatory: It has been proposed to mention PAN/GIR obligatory in respect of certain high value transaction like: Sale/purchase of immovable property; Dealing in shares exceeding Rs 50000; Applying for telephone connection; Opening of bank account; Making payment to hotel exceeding amount Rs 25000.

A simple form: The FMhas introduced a single one page form called "Saral" which will be filled by certain class of tax payers. This will encourage tax payers to abide the law voluntarily.

Introduction of samadhan scheme: The FM has announced a new scheme to counter the pending disputes and matters involving large amount of taxes by offering them to pay tax at the current rate and take immunity from interest and prosecution provisions.

Aboliton of gift tax: The gift tax act has been repealed and from September 1998 onwards any gift received by the person will be taxable as income in his hands. Certain exemption to NRI remittances will remain.

Tax on medical institutions and educational institutions: Uptil now the medical institutions and educational institutions were exempt under income tax. The FM proposed to withdraw the exemption and bring them under the tax net.