Bringing major cheer to the common man, Finance Minister Arun Jaitley today announced income tax relief on House Rent Allowance (HRA) to be raised from Rs 24,000 per annum to Rs 60,000 per annum.
Also, those earning up to Rs. five lakh a year will now get a tax relief of Rs. 5,000, up from Rs. 2,000 previously. The hike will effectively raise the basic exemption for the taxpayers to up to Rs. three lakh.
In an innovative move, Jaitley in his Budget speech also announced 100 percent Foreign Direct Investment ( FDI) through FIPB route in food products produced and marketed in India.
Apart from the above exemptions, Jaitley announced a one percent additional tax on cars costing above Rs. 10 lakh.
“One percent additional tax will be charged on luxury cars above Rs. 10 lakh,” Jaitley announced.
In a move aimed at checking pollution and encouraging use of hybrid cars, Jaitley also announced that a one percent infra cess will be levied on small petrol cars. A 2.5 percent infra cess will be imposed on diesel cars.
Jaitley also said that a four percent additional levy will be imposed on high-capacity passenger vehicles and SUVs.
The increase has come at a time when there has been a lot of noise about growing levels of pollution in the country.