Giving special treatment to senior citizens, Pranab Mukherjee announced the creation of a new category of ‘Very Senior Citizens’— 80 years and above — and has offered an exemption limit of upto Rs 5 lakh on their net taxable income beginning fiscal 2012. They will thus have no tax liability on incomes below that level.
Individuals in this category who have a net taxable income of Rs 10 lakh will now see their tax liability come down from Rs 1,50,380 to Rs 1,23,600 and thus a saving of Rs 26,780.
Mukherjee did not stop with this. He has also reduced the qualifying age of senior citizens from 65 years to 60, and raised the exemption limit for the 60-79 age bracket from Rs 2,40,000 to Rs 2,50,000 thus providing them an additional savings of Rs 1,030.
Personal finance experts have cheered the move. “While there is an overall disappointment on the personal tax front, reduction in qualifying age is the only significant move as it will cover a lot of individuals and help them save some money,” said Rajiv Deep Bajaj, vice chairman and MD Bajaj Capital.