Tax exemption limit may go up

Budget May Hike It To Rs 1.75-Rs 2L From Rs 1.5L, FBT Could Go Up

The full budget to be presented by the new government in the forthcoming session of Parliament to begin sometime next month may come packed with some concessions for the middle class by way of raising the tax exemption limit to up to Rs 1.75-Rs 2 lakh from the current Rs 1.50 lakh.

Other Benefit

The other benefit in the direct tax segments could be withdrawal of the Fringe Benefit Tax [FBT].

If through, both these measures will result in a tax outgo of around Rs 10,000 crore. Proposals in this regard are under active consideration, indicated a senior official in the finance ministry.

Other Proposals

The commerce ministry is firmly backing industry’s proposals for extending tax sops to export-oriented units, besides the continuation of interest rate subvention till March 2010.

In their proposals to the finance ministry, industry chambers had asked the government to include measures in the budget that would promote investment and create additional demand.