Income tax exemption limit raised to Rs.2 lakh

The tax exemption limit for individuals has been hiked to Rs.2 lakh from the current Rs.1.8 lakh, while the tax slabs have been re-jigged to provide relief to tax payers.

Presenting the union budget for 2012-13 in the Lok Sabha, Finance Minister Pranab Mukherjee said the upper limit for the 20 percent tax slab would be increased to Rs.10 lakh.

"I propose to enhance the exemption limit for individual from Rs.1.80 lakh to Rs.2 lakh. I also propose to raise the upper limit of the 20 percent tax slab from Rs.8 lakh to Rs.10 lakh," Mukherjee said.

"This measure will provide a tax relief of Rs.2,000 to every taxpayer of this category," Mukherjee said.

The new tax slab for the coming fiscal will be 10 percent tax for income above Rs.2 lakh and up to Rs.5 lakh, 20 percent for above Rs.5 lakh and up to Rs.10 lakh, and 30 percent for income above Rs.10 lakh.

Source: IANS