New Delhi, February 26
The Finance Minister today proposed major personal income tax sops by offering Rs 26,000 crore relief. However, the Budget proposals on indirect taxes place an additional burden of Rs 46,500 crore.
The FM has proposed to bring down the income tax load considerably by raising the slabs for all the three rates. The 10 per cent rate would now be applicable for incomes between Rs 1.6 lakh a year and Rs 5 lakh. The existing slab is Rs 1.6 lakh to Rs 3 lakh. Tax is proposed to be charged at 20 per cent for incomes between Rs 5 and Rs 8 lakh, against Rs 3-5 lakh now. Incomes above Rs 8 lakh would now be subjected to 30 per cent tax, against the present limit of above Rs 5 lakh. There is no change in the tax exemption on incomes up to Rs 1.6 lakh.
In addition, a person investing up to Rs 20,000 in long term infrastructure bond would get tax exemption over and above the Rs one lakh savings allowed under the present I-T regime. All this would bring down the tax burden by Rs 50,000 for individuals earning up to Rs 8 lakh and
Rs 20,000 on those with incomes up to Rs 5 lakh.
However, people would have to pay more for several items of their daily needs as the Budget seeks to hike the indirect tax rates to mop up Rs 46,500 crore as additional revenue.
Besides petrol and diesel, the prices of which have gone up from tonight, the items that would cost more are soaps, talcum powder, shampoos, hair colour, diapers, television sets, air-conditioners and silver and gold ornaments as a result of higher duty.
Also, the Minister has proposed to bring five more services under the service tax net. The new services are air passenger transport service, information technology software service, commercial training or coaching service, sponsorship service and construction of complex service.
A few items such as toy ballons, LED lights, battery-operated cycle ricshaws, items made of compostable polymer, cellphone sets made within the country may cost less following a cut in excise and customs duties.
