New Delhi: The government raised the income tax exemption limit for general tax payers by Rs 20,000 to Rs 1.8 lakh per annum and introduced a high new tax slab for senior citizens of 80 years and above.

Unveiling the Budget proposals for 2011-12 in the Lok Sabha, Finance Minister Pranab Mukherjee also proposed to reduce the age limit for consideration as senior citizens from 65 years to 60.

Senior citizens will get tax exemption for income up to Rs 2.5 lakh, higher from Rs 2.4 lakh now.

As per the announcement, the increase in the income tax exemption limit for general tax payers (excluding women and senior citizens) to Rs 1.8 lakh per annum would translate into a benefit of Rs 2,000 for all tax payers.

At present, the general tax payers earning more than Rs 1.6 lakhs per annum are required to pay income tax.

Introducing a new tax slab for very senior citizens (80 years and above), Mukherjee said, they will not have to pay any tax for annual income up to Rs 5 lakh.

     INCOME                                 TAX RATE

     (General Tax Payers)
1.  Up to Rs 1,80,000                      NIL
     Rs 1,80,001 to Rs 5,00,000        10 per cent
     Rs 5,00,001 to Rs 8,00,000        20 per cent
     Rs 8,00,000 and above               30 per cent

2   (For Women)
     Up to Rs 1,90,000                     NIL
     Rs 1,90,001 to Rs 5,00,000        10 per cent
     Rs 5,00,001 to Rs 8,00,000        20 per cent
     Rs 8,00,000 and above              30 per cent

3   (For Senior Citizens of 60 years But less than 80 years)
     Up to Rs 2,50,000                     NIL
     Rs 2,50,001 to Rs 5,00,000        10 per cent
     Rs 5,00,001 to Rs 8,00,000        20 per cent
     Rs 8,00,000 and above              30 per cent

4    (Very Senior Citizens of 80 Years and Above)
      Up to Rs 5,00,000                     NIL
      Rs 5,00,001 to Rs 8,00,000        20 per cent
      Rs 8,00,000 and above              30 per cent

(JPN/Agency)