Budget 2012 No tax for income up to Rs 2 lakh

Budget 2012 No tax for income up to Rs 2 lakh

By: || Updated: 16 Mar 2012 03:07 AM

New Delhi: Giving some
relief to tax payers, Finance Minister Pranab Mukherjee on Friday proposed
raising the income tax exemption limit for individuals to Rs 2 lakh per
annum from Rs 1.80 lakh.

Unveiling the Budget proposals for
2012-13 in the Lok Sabha, he also increased the limit to Rs 10 lakh under
the 20% tax slab. The current limit is Rs 8 lakh.

"My proposals
on direct taxes are estimated to result in a net revenue loss of Rs4,500
crore for the year," Mukherjee said.

The Budget also exempt up to
Rs10,000 of interest income from tax.

Individual will have to pay
10% tax on income between Rs 2 lakh and Rs 5 lakh; 20% between Rs5 lakh
and Rs 10 lakh; and 30% for above Rs10 lakh.

Mukherjee said
increasing the exemption limit is a move towards implementation of the
Direct Taxes Code (DTC).

The Standing Committee of Parliament
that has scrutinised the DTC Bill had suggested raising the tax exemption
limit to Rs3 lakh.

The exemption limit for the senior citizens
between 60 and 80 years of age will be Rs2.50 lakh; 10% will be levied on
income between Rs  2.5-5 lakh, 20% between Rs 5-10 lakh and 30% above
Rs10 lakh.

For very Senior Citizens (80 years and above), the
income tax exemption limit will be Rs 5 lakh; 20% will be levied on income
between Rs5-10 lakh and 30% for above Rs10 lakh.

implementation of DTC, Mukherjee said, "We received the report of the
Parliamentary Standing Committee on March 9, 2012. We will examine the
report expeditiously and take steps for enactment of DTC at the earliest."

DTC Bill seeks to replace the half-a-century-old Income Tax Act, 1961.

savings bank account deductions, Mukherjee said, will help small tax

"This would help a large number of small tax payers with
salary income of up to Rs 5 lakh and interest from savings bank accounts
up to Rs10,000, as they would not be required to file income tax returns,"
Mukherjee said.

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