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As part of a major overhaul of direct taxes, the tax brackets have been altered as under:
Up to Rs. 1 lakh
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Nil
Rs. 1 lakh to Rs. 1.5 lakh
..
10 per cent
Rs. 1.5 lakh to Rs. 2.5 lakh
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20 per cent
Above Rs. 2.5 lakh
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30 per cent
Further the level at which the surcharge of 10 per cent will apply has been raised to Rs. 10 lakh taxable income.
The standard deduction has been removed. Instead every taxpayer will be allowed a consolidated limit of Rs. 1 lakh for savings which will be deducted from the income before tax is calculated. All prevailing sectoral caps are to be removed. The rebate under section 88 is to be eliminated and section 80L will be omitted.
In addition to the sum of Rs. 1 lakh, the deductions on interest paid on housing loan for self-occupied house property, medical insurance premia, specified expenditure on disabled dependant, expenses for medical treatment for self or dependant or member of a HUF, deduction in respect of interest on loans for pursuing higher studies, and deduction to a person with disability will continue to receive the same tax treatment as prevails now.
The threshold exemption levels for women have been revised to Rs. 1.25 lakhs and for senior citizens to Rs. 1.5 lakhs.
SB/MVVS/RS/AS
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