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Thursday 10 July 2014

Union Budget 2014-15: Tax exemption limit raised to Rs 2.5 lakh

Union Budget 2014-15: Tax exemption limit raised to Rs 2.5 lakh
Last Updated: Thursday, July 10, 2014, 13:34
New Delhi: Salaried class has got something to cheer with Finance Minister Arun Jaitley on Thursday raising tax exemption limit to Rs 2.5 lakh from Rs 2 lakh, providing a relief of Rs 5,000.

"I propose not to make any changes in the tax rate. However, with the view to provide relief to small and marginal and senior citizen, I propose to increase the personal income tax exemption limit by Rs 50,000 from Rs 2 lakh to Rs 2.50 lakh in case of all individual tax payer who are below the ago of 60 years," he said while presenting budget for 2014-15 in the Parliament.

The proposal, according to an estimate, is likely to be benefit about 2 crore tax payers.

Similarly, he raised tax exemption limit from Rs 2.5 lakh to Rs 3 lakh in the case of senior citizens.
"I do not propose to make any change in the rate of surcharge for either for corporates or individual. The education cess for all tax payers shall continue at 3 percent," he said.

Thus, tax on income from Rs 2.5 lakh to Rs 5 lakh is retained at 10 percent, up to Rs 10 lakh at 20 percent and above 10 lakh at 30 percent.

Noting that households are main contributors to savings, he said the investment limit under 80 C has been raised to Rs 1.5 lakh from the existing Rs 1 lakh to encourage savings.

Investment in Public Provident Fund up to Rs 1.5 lakh would now be exempt from tax. This was earlier pegged at Rs 1 lakh.

He also raised tax deduction limit on account of interest of housing loan in case of self occupied property to Rs 2 lakh from Rs 1.5 lakh.

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