Finance Minister Pranab Mukherjee in his Budget speech for 2009-10 raised the tax-exempted income limit by Rs 10,000. Men would now have to pay taxes on income above Rs 1.6 lakh while women have to pay it on income over Rs 1.9 lakh.
However, senior citizens have been given a relief of Rs 15,000, so they would have to pay taxes on income over Rs 2.4 lakh per annum.
High income individuals earning Rs 10 lakh or more, however, would be the biggest beneficiary as the 10 per cent surcharge has been done away with, which would help them save Rs 1,000 on every Rs 1 lakh additional income.
Those under the ambit of wealth tax would also save at least Rs 15,000 a year as threshold for charging of this tax has been doubled to Rs 30,00,000.
Till now individual with a net wealth exceeding Rs 15,00,000 were paying one per cent as wealth tax every year.
Commenting on the move, legal expert Aseem Chawla from Amarchand Mangaldas said, "Reduction in personal tax rates more particularly removal of surcharge is a welcome measure and step in the direction for rationalising tax rates."
