New Budget 2007 - Proposed changes
February 19th, 2007Salaried employees can expect some relief in the Budget. The income tax exemption limit of Rs 1 lakh is likely to be hiked to Rs 1.5 lakh. Moreover, new tax-saving instruments are to be introduced
Tax incentives are going to be showered on senior citizens. The qualifying age is likely to be reduced to 60 years as against the prevailing 65 years. Besides, the TDS limit is likely to be hiked to Rs 10,000 (from Rs 5,000).
The excise duty on crude oil is likely to be reduced, paving way for reduction in petrol and diesel prices. If there is a cut in the excise duty, petrol prices may come down by Rs 2 per litre and that of diesel by Re 1 per litre.
The exemption limit for service tax is likely to be hiked from Rs 4 lakh to Rs 10 lakh. This will benefit a large number of individuals who provide taxable services such as beauty enhancement at parlours.
Major tax incentives are expected on bank deposits. The restoration of tax exemption on interest income up to Rs 15,000 and increase in the ceiling for TDS from Rs 5,000 to Rs 10,000 will boost demand for deposits in a major way.
There is an indication that the service tax rate is to be raised from 12 per cent to 14 per cent. Besides, 44 new items - such as lending services, sports and amusement parks - are set to be brought under the service tax net.
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