Gratuity limit increased Gratuity limit hiked from Rs 10 lakh to 30 lakh for employees with service of at least five years from the next fiscal.
For salaried persons, the standard deduction is being raised from the current Rs 40,000 to Rs 50,000, which will give additional tax benefit of over Rs 3000 to over 3 crore salary earners and pensioners.
He said with this, individuals who are earning gross income of Rs 6.5 lakh per year and have made investments in savings instruments, will be exempt from paying income tax.
The tax deductible at source (TDS) threshold on interest income from bank, co-operative society and post office deposits (other than interest on securities) has been raised. Tax will be payable only for interest income of above Rs 40,000 per year on bank fixed deposits. "All income tax returns to be processed within 24 hours and refunds to be issued simultaneously", he said.
The point to note here is that since this is a rebate up to a taxable income of Rs 5 lakh, if anyone earns even little more (say, even Rs 100 more) than this amount, he would have to pay all the taxes, according to the existing slabs.
Fed pledges patience on rate hikes
But at some point, to avoid weakening the economy, it could slow that process or end it sooner than now envisioned. That message had sparked fears in financial markets that the Fed might tighten credit too aggressively this year.
- Benefit of rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to 2 crore rupees; can be exercised once in a lifetime.
Shalini Jain, Partner, EY India: "Anyone with net taxable income up to Rs 5 lakh will not be paying any taxes". The decision to reduce tax burden for middle class may leave up to Rs 10,000 per annum more in the hands of individuals which, may eventually get utilised for consumption and may thereby push growth in the economy.
Addressing the issue about farmers, Modi said that there have been several schemes by different governments from time to time but only 2-3 crore farmers were included in those schemes.
This will not mean any tax benefit, but it will result in greater convenience.
The move could potentially benefit three crore taxpayers, said the government.