Presenting his fourth consecutive budget, Finance Minister P Chidambaram greatly disappointed personal income tax payers.
Chidambaram's Budget for 2007-08 on Wednesday proposed a marginal Rs 10,000 increase in threshold tax exemption limit, while foisting an additional one per cent education cess on them.
In the backdrop of rising prices and high inflation, tax payers were expecting increase in exemption limit by Rs 30,000 to Rs 50,000. But the threshold limit now stands at Rs 110,000 against Rs 100,000 earlier. The increase in exemption limit, which will provide a relief of Rs 1,000 to Rs 2,000, will be partly neutralised by increase in education cess from 2 per cent to 3 per cent.
This has to be paid not only on income tax but also on all products and services covered under excise, customs and service tax.
The finance minister has also put additional burden on tax payers investing in stock markets by raising dividend distribution tax from 12.5 per cent to 15 per cent. The Budget proposes to increase the income tax exemption limit from Rs 100,000 to Rs 110,000. For women, the exemption limit has been raised from Rs 135,000 to Rs 145,000, and for senior citizens from Rs 185,000 to Rs 195,000.
