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From 1.80 Lakhs to 3.00 Lakh Tax Relief Limit may be increased in Budget.

The Standing Committee on Finance, headed by former Finance Minister and senior BJP leader Yashwant Sinha, will discuss the final draft of the report on the DTC Bill during its day-long meeting on Friday. And as per the Economical Finance survey some good news for Salaried Taxpayee that, the Finance Minister Pranab Mukharjee may announced in the Budget for Financial 2012-13 a New Tax Slab Exemption Limit for Assessment year 2013-14 by increasing the income tax exemption limit up to Rs. 300000.00 Now the existing Tax Exemption limit is Rs. 180000.

Sources indicated that the new tax slabs could be in line with the Direct Taxes Code Bill, which was introduced in Parliament in 2010. The bill has proposed that incomes between Rs. 3 to 5 lakh be taxed 10%, those between Rs. 5 to 10 lakh be taxed 20% and incomes above Rs. 10 lakh per annum be taxed 30%. At present, incomes between Rs. 1.8 lakh and Rs. 5 lakh are taxed 10%, those between Rs. 5 to 8 lakh taxed 20% while incomes above Rs. 8 lakh attract a tax rate of 30%. (Check ready reckoner for Financial year 2011-12)

A rejig in tax slabs along with a hike in exemption limits will enhance people's disposable incomes, which, in turn will boost consumption spending as well as savings.The government is negotiating through a maze of thorny issues ahead of this year's budget amid faltering demand and rising prices that have hit growth in the broader economy.

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