There is good news for individual tax payers. The investment tax free limit for individuals will be raised to 150,000 from 100,000. The proposal is set forth in order to mobilize funds for infrastructure which needs an investment of $500 billion as earmarked in 11th plan. In order to bridge the deficit of $40 billion for infrastructure, this move is forwarded by the Power minister and planning commission deputy chairman, Mr. Montek singh Ahluwalia.

The exemption limit comes with a rider that additional 50000 should be invested in infrastructure bonds. Till 2004-05, individual tax payer was given an investment exemption limit of 100,000 out of which a maximum of 30,000 could be invested in infrastructure bond. The clause was later removed in 2005-06 and infrastructure bonds were made part of 1 lakh limit. The sub limit is now proposed to be enhanced with an additional exemption of 50,000.

This is great news for individual tax payers and will serve dual purpose of mobilizing funds for infrastructure and providing additional relief to tax payer. So, next year when Finance Minister presents the budget, we can expect goodies from him.

Popularity: 1% [?]