In the Budget 2011, some of the changes in the realm of personal taxes are increase in basic exemption limit from Rs 1,60,000 to Rs 1,80,000, reduction in the age for being a ‘senior citizen' from 65 years to 60; and creation of yet another category of taxpayer called ‘very senior citizen' comprising those of 80 years and above, eligible for basic exemption limit of Rs 5 lakh.
The changes in basic exemption limit would result in a tax benefit of Rs 2,060 to all the taxpayers having income above the limit. In the case of women assessees, because of non-increase in exemption limit, the tax benefit is limited to Rs 1,030 instead of the previous Rs 3,090 when compared with general taxpayers.
The reduction in age recognition of senior citizens from 65 years to 60 years and pegging the exemption limit at Rs 2,50,000 means a mere tax saving of Rs 1,030 for those who already belong to that category. In the case of new entrants to sexagenarian category, the comparative benefit is Rs 9,270 as against the present tax rates.
For the new category of taxpayers called ‘very senior citizen', the Finance Minister is liberal by giving across the board exemption limit of Rs 5 lakh which means the longer the life tenure the lower is the tax liability.
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