Individual
taxpayers may not have any reasons to rejoice, but they
need not be disappointed either by the budget proposals.
As the finance minister said, the current individual
tax rates were introduced just 2 years back and it would
have been too much to expect a further reduction this
year.
However,
the finance minister has offered some minor concession
by increasing the basic exemption limit modestly by
Rs10,000. The revised exemption limits are as below:
Category
|
Exemption
limit in Rs
|
Individuals
|
1,10,000
|
Women
assesses
|
1,45,000
|
Senior
Citizens
|
1,95,000
|
At
existing tax rates, general and women assesses stand
to gain Rs1,000 per year while senior citizens would
benefit by Rs2,000 per year.
The
only other major change in direct tax policy for individuals
is the hike in deduction under section 80D for medical
insurance premium paid. This has been increased to Rs15,000
per year from Rs10,000 for general assesses and to Rs20,000
pen year for senior citizens
There
was considerable speculation that tax exemption for
prescribed investments and expenses under section 80C
would be hiked to Rs1,50,000 per year and exemption
for interest paid on housing loans would be increased
to Rs2,00,000. Both these demands have been ignored
by the finance minister
The
increase in dividend distribution to 15 per cent would
reduce the dividend income at the hands of individual
shareholders. Including stock options under FBT may
discourage some companies from offering such options
to employees in future.