Finance minister Pranab Mukherjee has announced a series tax reliefs in his budget - mostly in the field of direct and corporate taxes - to boost the sagging economy. of measures, mostly in the area of direct taxation. Salient among the new measures:
- Income tax exemption limit has been raised from Rs1.50 lakh to Rs1.60 lakh for ordinary individual taxpayers. This limit has been further hiked by Rs. 15,000 for senior citizens from Rs2.25 lakh to Rs2.40 lakh; and from Rs1.80 lakh to Rs1.90 lakh for women taxpayers.
-The deduction under Section 80-DD has also been incrased to Rs1 lakh from the present limit of Rs75,000 in respect of maintenance, including medical treatment of a dependent who suffers from severe disability.
The finance minister said he recognised that surcharge of direct taxes should be removed, as the government has set out National Calamity Contingency Fund to build up resources to meet emergency situations.
Underlining that such removal has to be balanced with the revenue needs of the government, Mukherjee said that in the first instance he propose to phase out the surcharge on direct taxes by eliminating the surcharge of 10 per cent on personal income tax.
-To make the process of income tax return form simple and user friendly, Mukherjee has asked his department to speed up work on the 'Saral'ARAL II form for early introduction.