FM brings cheer to old & women

MUMBAI: There's some relief in store for the fairer sex and senior citizens. As per the amendments to the Finance Bill, the basic exemption limit for both these sections of society is set to go up. For senior citizens, who have been complaining that their income has been declining over the last few years due to falling interest rates on savings instruments, the limit may be raised to Rs 1.85 lakh. For women, the exemption limit may be pegged at Rs 1.35 lakh. The basic exemption limit or threshold limit refers to the limit of total taxable income up to which an individual will not have to pay any tax. The tax meter starts ticking only after the taxable income crosses the exemption limit. In this year's Union Budget, the basic exemption limit was proposed to be raised to Rs 1 lakh for all individuals from the earlier ceiling of Rs 50,000. However, there was an attempt to provide additional benefits for senior citizens and women by providing them a higher basic exemption limit. The higher benefit on this front was sought to be balanced by eliminating the existing rebate for both these sections. The Budget had proposed that the new basic exemption limit for women would be kept at Rs 1.25 lakh while that for senior citizens would be pegged at Rs 1.5 lakh. As against this, the existing rebate from the tax to be paid for women to the extent of Rs 5,000 under Section 88C and the rebate for senior citizens for Rs 20,000 under Section 88B was eliminated. Tax experts and chartered accountants had made several representations after the Budget pointing out that the proposed extra benefits to both these categories wasn't actually an extra benefit. For instance, with an existing rebate of Rs 20,000, the tax burden for senior citizens is already zero, assuming an income of Rs 1.51 lakh. Further, as the government had withdrawn benefits of standard deduction and deduction under Section 80L this year, senior citizens earning a pension along with interest income would have had to pay higher tax. In case the basic exemption limit was raised to Rs 1,35,000 for women, it would translate into a modest additional benefit of Rs 1,000 on the tax front. The income after this limit would be taxed at 10% till Rs 1,50,000 and then at 20% from Rs 1,50,000 to 2,50,000. Senior citizens, on the other hand, would be levied a tax at 20% for the income above Rs 1,85,000 and hence there would be no 10% slab for them.

FM brings cheer to old & women

There's some relief in store for the fairer sex and senior citizens. As per the amendments to the Finance Bill, the basic exemption limit for both these sections of society is set to go up.

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