With the much awaited Budget of 2011-12, tax payers can anticipate some relief their way. The government may raise the income tax (I-T) exemption limit for individuals
In line with the Direct Taxes Code (DTC) in 2012-13 the government is committed to raise the income tax exemption limit from Rs 1.6 lakh per annum to Rs 2 lakh. Under the DTC Bill, which was introduced in Parliament last year, the I-T exemption limit is of 2 lakh. Through the Bill, the government seeks to widen tax slabs to levy 10% rate on income between Rs 2 lakh and Rs 5 lakh, 20 per cent on Rs 5-10 lakh and 30 per cent above Rs 10 lakh.
DTC, which would replace the Income Tax Act, is due to come into effect from April next year. At present, income up to Rs 1.6 lakh is exempt from tax for individuals. For women and senior citizens, the limit is 1.9 lakh and 2.4 lakh, respectively.