60+ taxpayers get a bonanza
Male taxpayers and senior citizens have reason to cheer as finance minister Pranab Mukherjee raised the threshold limit for individual male taxpayers and senior citizens. This has been raised by `20,000 to `1,80,000 for male taxpayers, while for senior citizens it has been raised by `10,000 to `2,50,000. Also, the qualifying age for senior citizen status has been reduced by five years — from 65 to 60.
Mr Mukherjee has also introduced a new category of “very senior citizen” — those aged 80 and above — for whom the exemption limit has been raised to `5 lakhs.
There is, however, no change in tax slabs of women taxpayers. They will continue to be exempt from income-tax till `1,90,000. Individual taxpayers will save `2,000. The tax rates remain unchanged.
Income between `1,80,000 and `5,00,000 will be taxed at 10 per cent. Income between `5,00,000 and `8,00,000 will be taxed at 20 per cent. All income above `8,00,000 would be taxed at 30 per cent.
“Individuals in the 60-65 age group are the maximum gainers — they will now enjoy the exemption limit for senior citizens,” said direct tax expert Subhash Lakhotia. “It is a big disappointment for women taxpayers as they do not get anything out of this Budget.
In a high-inflation economy, there were expectations of tax incentives on investments.”
To attract long-term savings in the infrastructure sector, the finance minister extended the `20,000 investment limit in infrastructure bonds by one more year. This is over and above the `1 lakh rebate available under Section 80C of the Income-Tax Act. Investment in infrastructure bonds will help individuals save income tax up to `6,150. The actual tax rebate will depend on the slab an individual falls under.
Jayesh Sanghvi, partner, direct tax, Ernst & Young, said: “The FM has maintained the status quo on tax rates. The focus was more on growth and policy decisions than on individual tax rates.”
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