New Delhi: The Union Budget did not propose any change in the structure of income tax for individuals leaving country’s 40 million individual tax- payers underwhelmed. Presenting the Budget in Parliament, Finance Minister Arun Jaitley said the government had many positive changes in the personal income –tax rate applicable to individuals in the last three years and for this reason it was untouched.
The annual tax exemption remained unchanged at Rs 2.5 lakh. He also did not rejig tax slabs.The salaried class, however, could be disappointed, as tax breaks on money invested in savings instruments, including bank fixed deposits, insurance premium and mutual funds, remained unchanged at Rs 1,50,000 under the popular “Section 80C” scheme.
Currently, those with an income of less than Rs 2.5 lakh a year are exempt from taxes. Those earning between Rs 2.5 lakh and Rs 5 lakh annually are taxed at 5 percent, those between Rs 5 lakh and Rs10 lakh at 20 percent, while anybody earning more than Rs10 lakh pays a tax of 30 percent.However, in order to provide relief to salaried tax payers the government allowed a standard deduction of Rs 40,000 in lieu of the present exemption in respect of transport allowances and reimbursement of miscellaneous medical expenses.
In addition, there is an additional surcharge of 10 percent applicable on persons with annual taxable income between Rs 50 lakh to Rs 1 crore, and a 15 percent surcharge imposed on persons with a taxable income of more than Rs 1 crore. There is also a three percent education cess applicable on all taxpayers.(UNI)