New Delhi: P Chidambaram's proposal in the Union Budget 2007-08 to keep the slabs for individual income tax unchanged may have disheartened the middle-class, but the Prime Minister doesn't think his Finance Minister has been unfair to them.
"What more can we give, my friend?" was Prime Minister Manmohan Singh's riposte when he was asked if the government had not dashed the hopes of taxpayers who were aspiring for exemption limit to go up to Rs 1,50,000.
The Union Budget has only marginally raised the threshold limits for each slab by Rs 10,000. This will mean an Rs 1,000 tax saving for every assessee.
"Dus hazar rupaiya diya tho hai, aur kya dein. (We have given you Rs 10,000, what more should we give?)," the Prime Minister said. "Aapko har saal exemptions chahiye? Humnein exemptions diya tho hai. (You want exemptions every year? We have given you exemptions this year)," the PM said.
As per the Budget proposals, the threshold limits now stand at Rs 1,10,000 for individual tax payers, Rs 1, 45,000 for women and Rs 1,95,000 for senior citizens.
However, the Budget does have something new for the tax-payer as it proposes to deduct interest paid on loans taken for education of children or spouse from the taxable income. The amendment in Section 80E of the Income Tax Act, as proposed in the Budget, would expand the scope of those availing of this benefit.
Earlier, the tax sop was available only to the person who took the loan for his/her own education and not for the education of children or spouse. "It is proposed to define the term 'relative'...so as to mean spouse and children of the individual," the Budget document said.
(With PTI inputs)
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