New allowance limits: The exemption limits of allowances such as children education allowance, transport allowance, medical allowance etc., are very low in the current financial situation and inflation. These limits are fixed long before and tax payers expect to hike these limits to beat the inflation.
New TDS rates and limits: TDS rates and minimum amount for deduction of tax at source are also may be revised. These limits and rates are also affected with inflation.
New Tax slab limits: At present there is not tax for a net income of Rs. 180000 for gents and Rs. 190000 for ladies and it is expected that these limits may be raised to 200000 for both ladies and gents.
Now the tax rates are 10% for an income up to Rs. 500000 and 20% for an income more than 5 lakh up to Rs. 800000 and 30% tax for an income more than 800000. Theses tax slab rates may be revised as follows:-
Up to Rs. 200000 the tax rate is Nil
From 200000 to 500000 the tax rate is 10%
From 500001 to 1000000 the tax rate may be 20%
And more than 1000000 the tax rate may be 30%
No income tax return: Now the salaried person those who have an income up to Rs. 500000 only (Income from salary and interest) with an interest less than Rs. 10000 should not file income tax return, if he declare the interest to the employer and allow the employer to deduct TDS accordingly. If the interest up to Rs. 10000 exempted from income tax, this declaration can be avoided.
New Tax saving strategy: It is expected that the new tax saving strategy may come into force from the coming financial year which may helpful to promote small savings investments.
All the above mentioned changes are only expectations of common man which may propose through the coming budget 2012.
Budget 2012 expectation for income tax payers
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