NEW DELHI: Contrary to expectations, Finance Minister Arun Jaitley announced that there will be no change in personal income tax slab for salaried employees in the current fiscal year.
Noting that the number of those who filed Income Tax return in the last year has increased, Jaitley said: "the Government has made many positive changes in the personal income tax rates applicable to individuals in the last three years, therefore, I do not wish to make any changes to this."
However, in some relief for the salaried class, Jaitley announced that the standard deduction of Rs 40,000 has been increased in respect of transport allowance and reimbursement of miscellaneous medical expenses.
Presenting the Budget, the Finance Minister said, "Standard deduction shall significantly benefit the pensioners also, who normally do not enjoy any allowance on account of transport and medical expenses. The revenue cost of this decision is approximately Rs 8,000 crores. The total number of salaried employees and pensioners who will benefit from this decision is around 2.5 crores."
The Finance Minister further said, "Apart from reducing paper work and compliance, this will help middle class employees even more in terms of reduction in their tax liability."
In his last Budget, Jaitley had proposed to reduce existing rate of taxation of those with income between Rs 2.5 lakh to Rs 5 lakh from 10 percent to 5 percent in the Budget.
Jaitley also made significant announcements for incentives aimed towards senior citizens. The exemption of interest income on deposits with banks and post offices has been increased from Rs. 10,000 to Rs. 50,000 and TDS shall not be required to be deducted on such income. This benefit shall be available also for interest from all fixed deposits schemes and recurring deposit schemes.
He also announced raising the limit of deduction for health insurance premium and medical expenditure from Rs. 30,000 to Rs. 50,000 under section 80D for senior citizens.