Union Budget 2014: Tax lift goes down, you're up one floor - Times of India

Finance minister Arun Jaitley has tried to put a little more money into taxpayers' pockets. He raised the exemption limit by Rs 50,000, that is from Rs 2,00,000 to Rs 2,50,000, for all taxpayers below the age of 60. For senior citizens, the exemption limit has been increased from Rs 2,50,000 to Rs 3,00,000 for all income groups.

For those whose income is between Rs 2,00,000 and Rs 5,00,000, the exemption limit hike is Rs 30,000 and not Rs 50,000 as in 2013-14. The previous government had allowed a deduction of Rs 20,000. This meant that income up to Rs 2,20,000 was tax exempt for those earning up to Rs 5,00,000. In 2014-15, however, income up to Rs 2,50,000 will be exempt.

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This means a benefit of Rs 5,150 to those whose income is between Rs 5,20,000 and Rs 1 crore. But for those whose income is more than Rs 1 crore, the net benefit will only be Rs 5,665 because 10% surcharge levied.

The exemption limit has been increased six times since 1997-98. Ten years back in 2004-05, the exemption limit was Rs 50,000.

If it is adjusted for inflation, the exemption limit should have been kept at Rs 92,700 only.

In the direct tax code, which has suggested reforms in the tax structure, it is proposed to increase the exemption limit to Rs 5,00,000.

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