The Finance Minister, Mr. P. Chidambaram has given a wee bit relief to the salaried employees; the middle class people are finally noticed by our government.
The new budget 2008 gives a person earning Rs. 1.5 lacs total tax exemption as opposed to current limit of Rs. 1.1 lacs. For working women the basic exemption limit has been raised from Rs. 1.45 lacs to Rs. 1.8 lacs and for senior citizens it is raised from Rs. 1.95 lacs to Rs. 2.25 lacs. There is a 10% tax on income between Rs. 1.5 –Rs. 3.0 Lacs, 20% tax on income between Rs. 3.0- Rs. 5.0 lacs and 30% tax for earnings above Rs. 5.0 lacs. For people with higher pay scale there has been a reduction in income tax liability of at least Rs. 4000. For middle class people like us the new budget is a bonanza as the personal income tax relief will raise our consumption and savings expectation. What with paying EMIs for home loans, personal loans every month and being able to just about to make ends meet that extra Rs. 4000 saved from the taxes will come as a welcome relief. The dream of buying that small car will also be a little nearer. There will be excise duty cut from 16% to 12% for small cars and two wheelers and with excise duty on metal scrap for steel and aluminum being done away with completely we can expect further reduction in auto prices.
The Financial pundits are talking about lack of major changes in the new budget but for us middle class people it has come as a boon.