Offering some respite to the common man, Finance Minister Pranab Mukherjee today proposed that the personal income tax exemption limit will be raised to Rs 200,000 (Rs 2 lakh) from the existing Rs 180,000.
Thus persons earning up to Rs 2 lakh a year would not need to pay any tax. The finance minister also revised the income tax slabs. The new tax slabs and rates are as follows: (Click on next)
• For annual income up to Rs 2 lakh: No tax
• For annual income from Rs 2 lakh to Rs 5 lakh: Tax at 10%
• For annual income from Rs 5 lakh to Rs 10 lakh: Tax at 20%
• For annual income above Rs 10 lakh: 30%
The finance minister also said that interest earned up to Rs 10,000 per year would be tax free too.
No advance tax for senior citizens.
Health insurance deduction up to Rs 5000 for preventive health checkup. FY13 market borrowing at Rs 4.79 lakh crore.
Service tax net widened; to include most sectors.
Negative list to include pre-school and high school education, entertainment services.
Sale of residential property exempted from capital gains if invested in equity or equipment of an SME.
All services to be taxed except those in negative list.
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