Budget 2012: Income Tax Exemption Limit Increased to Rs.2 Lakh

The Finance Minister in his budget-speech has announced raising the tax exemption limit to Rs.2 lakh from the current limit Rs.1.8 lakh. For those earning income between 2-5 lakh, the tax bracket will be 10%, for income between 5-10 lakh the tax slab will be 20%, income above 10 lakh the tax bracket will be 30%. The proposal also introduced raising the upper limit of the 20% tax slab from Rs.8 lakh to Rs.10 lakh. Thus, this measure will provide a tax relief of Rs.2,000 to every taxpayer of this category.

The following table shows the latest income tax slab for Year 2012-13 based on the budget presented on 16 March 2012: