Income tax exemption limit raised to Rs 2 lakh

The tax exemption limit for individuals has been hiked to Rs 2 lakh from the current Rs 1.8 lakh, while the tax slabs have been re-jigged to provide relief to tax payers.

Presenting the union budget for 2012-13 in the Lok Sabha, finance minister Pranab Mukherjee said the upper limit for the 20 % tax slab would be increased to Rs 10 lakh.

“I propose to enhance the exemption limit for individual from Rs 1.80 lakh to Rs 2 lakh. I also propose to raise the upper limit of the 20% tax slab from Rs 8 lakh to Rs 10 lakh,” Mukherjee said.

“This measure will provide a tax relief of Rs 2,000 to every taxpayer of this category,” Mukherjee said.

The new tax slab for the coming fiscal will be 10% tax for income above Rs 2 lakh and up to Rs 5 lakh, 20% for above Rs 5 lakh and up to Rs 10 lakh, and 30% for income above Rs 10 lakh.

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