In the last budget, the government raised the tax exemption limit for basic personal income by Rs 2.5 lakh for individuals and senior citizens. The basic exemption limit has not been revised since then. The next union budget, to be presented on February 1, 2022, is expected to bring in major changes for taxpayers. Some analysts expect a significant increase in the tax exemption limit for senior citizens. This article explores the details. It will help you determine whether you qualify for an increase.
As the age exemption limit has been increased, the tax benefits have increased as well. In addition to this, the age exemption limit of Rs 2.5 lakh is now higher. These increases will reduce the tax burden for seniors who are unable to work. In addition, the income tax exemption limit for women under age 60 has also increased. For families with dependent children, the tax relief amount has also increased to Rs 2.5 lakh. The basic exemption limit has also increased to Rs 2.5 lakh.
If a couple has combined income of $90,000, they can claim five tax exemptions worth $4,050 each, reducing their taxable income by $20,250. The deductions are taken from expenses and are generally either above or below the line. When calculating the amount of tax due, the exemptions and deductions must be compared with the AGI. This can help you determine the best tax-saving strategy for your circumstances.
The basic tax exemption limit for an individual taxpayer in India is Rs 2.5 lakh. In addition to this, all taxpayers can claim tax rebates up to Rs 12,500 on income up to Rs 5 lakh. Under the Income Tax Act, Section 87A provides a tax rebate of up to Rs 12,500 on net taxable income up to Rs 5 lakh. By taking advantage of the tax rebate, you can reduce your tax liability and earn more money.
The standard deduction is another tax benefit available to individuals. These are medical and transport allowances. The standard deduction is also known as the “standard deduction.” The standard deduction is applicable to all income levels except for pension income. The government introduced this benefit in the Union Budget 2018 and set a new limit of Rs 50,000 for individuals and Rs 12,700 for married couples filing jointly. If you are eligible to claim these benefits, you should check with your employer about the standard deduction amount for your income category.
There are various types of deductions under section 80G. Contributions to relief funds and charitable institutions are tax-deductible. These contributions can be in the form of cash, cheque or draft. The deduction limit is Rs2,000 for individuals in the 40-80 age group and Rs10,000 for Hindu Undivided Families. Interest on savings accounts can also be deducted. However, interest earned on fixed deposits cannot be deducted under section 80G.