The Budget brings happy tidings for tax payers. The basic exemption limit is up by Rs 10,000 for men and women taxpayers below 65, and by a generous Rs 15,000 for senior citizens. Surprisingly, the finance minister has been magnanimous even towards the rich by doing away with the surcharge on those with incomes above Rs 10 lakh and also doubling the threshold for wealth tax to Rs 30 lakh. But with perquisites likely to be taxed in the hands of employees, you may have to forfeit some of these gains

INCREASE IN THRESHOLD OF BASIC EXEMPTION

Senior citizens, resident women, you, me, everyone has a reason to cheer. The finance minister has increased the basic slab eligible for exemption. Senior citizens would see an increase in the exemption limit by Rs 15,000. For others, the increase will be Rs 10,000. This will result in savings between Rs 1,000 and Rs 1,500 per annum for individual tax payers. While the benefits may look nominal, in these days of an economic downturn, this is surely welcome.

ABOLITION OF SURCHARGE

High earning individual tax payers have more reasons to rejoice. Earlier taxable income beyond Rs 10 lakh was subject to a mandatory surcharge of 10%. This has been removed which will result in some more expendable income in the hands of the individual. If one actually looks into this, the effect is beyond 10%. In effect, this 10% reduction has a percolating effect on the education cess paid by the individual which was 3 % (tax + surcharge) earlier. So effectively the benefit would be 10.3%.

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