Finance Minister P Chidambaram has some good news for the salaried class. He has raised the exemption limit on Income Tax raised to Rs 1 lakh (Rs 100,000), meaning anyone earning up to Rs 100,000 per year will not have to pay any Income Tax.
- The finance minister has, however, not made any changes in the tax slabs.
- Chidambaram said that everyone will file tax returns and anyone with an annual income of Rs 100,000 will have his tax automatically rebated.
- This will take 1.4 crore tax assessees out of I-T net.
- Government remained committed to moderation and stability in tax rates, Finance Minister P Chidambaram said.
- Family pension for widows of armed forces and para-military forces killed in operations are exempted from income tax.
- 100 beds hospital in rural areas to get 100 % tax exemption under 80 I B.
- Section 80(DD) and Section 80 (U) will be given to persons suffering from autism, cerebral palsy and multiple disability.
- Contributions to Contributory Pension Scheme exempted form tax. Terminal Tax to be paid at the time of receipt.
- Loopholes in gift tax exemption to be plugged.
- Encouragement to automobile sector. Industry to be provided 150 per cent exemption for in-house research and development.
- Capital Gains Tax revamped on securities. Long term capital gains tax abolished.
- Tonnage tax introduced for shipping industry but will have option to pay either tonnage tax or corporate tax.