There is some good news for individual tax payers under the age of 60 years as Finance Minister Arun Jaitley increased the exemption limit on income to Rs 2.50 lakh from the current Rs 2 lakh. The savings limit under Income Tax Act Section 80C has also been hiked by Rs 50,000 to Rs 1.5 lakh while housing loan exemption limit has also been raised to Rs 2 lakh from Rs 1.5 lakh.
Those aged above 60 have also go some relief as income tax exemption limit for them has been raised to Rs 3 lakh from Rs 2.5 lakh.
So those in the highest tax bracket of 30 per cent can save up to a maximum of Rs 35,000 per year. The Rs 50,000 hike in income tax exemption limit will result in saving Rs 5,000 while under 80C an individual can save Rs 15,000 more.
If the individual has a housing loan then he/ she can save an extra Rs 15000 which will result in a maximum tax saving of 35,000 per year.
Income tax exemption impact:
Individual Tax Payers up to the age of 60 years
Up to Rs 2,50,000 - No tax - Savings Rs 5,000
Rs 2,50,001 to Rs 5,00,000 - 10 per cent tax - Savings Rs 5,000
Rs 5,00,001 to Rs 10,00,000 - 20 per cent tax - Savings Rs 5,000
Above Rs 10,00,000 - 30 per cent tax - Savings Rs 5,000
Senior Citizens above 60 years
Up to Rs 3,00,000 - No tax - Savings Rs 5,000
Rs 3,00,001 to Rs 5,00,000 - 10 per cent tax - Savings Rs 5,000
Rs 5,00,001 to Rs 10,00,000 - 20 per cent tax - Savings Rs 5,000
Above Rs 10,00,000 - 30 per cent tax - Savings Rs 5,000
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