If you are a salaried taxpayer in the lower brackets, cheer up. For people with taxable incomes up to Rs 100,000, there's no tax at all.
But if you are earning much more, and think that the relief at the lower end will also benefit you somewhat, think again. The finance minister has not changed the tax slabs, and people residing just marginally above the tax-exempt limit will probably lose.
As for individuals at the higher tax brackets, the taxes will get a bit worse since all taxes will incur a two per cent education cess.
There is, however, relief for substantial numbers - but not freedom from filing returns. As the finance minister said: "My proposal will give relief to 1.4 crore assessees...While everyone will file his return according to the current tax slabs and tax rates, and compute his taxable income and the tax payable, any one with a taxable income of Rs 100,000 will have his income tax liability automatically rebated. I cannot give more relief, or relief across the board, in this budget. If compliance improves, I promise to revisit the subject."
In the short run, the tax proposals seem a bit unfair to taxpayers immediately above the Rs 100,000 bracket. If you are earning up to Rs 11,000 more than Rs 100,000 of taxable income, on this additional income you may be paying Rs 11,200 as tax . You will be even worse off than before.
The finance minister has justified his decision to leave the tax slabs alone thus. "I cannot afford to lose a large amount of revenue at a time when the government has assumed a larger responsibility for investment and welfare programmes."
Other direct proposals include I-T exemptions on family pensions for widows of armed forces and paramilitary forces killed in operations.
The minister has also proposed to extend the benefit of Section 80DD and Section 80U for persons suffering from autism, cerebral palsy and multiple disability.
Other tax breaks are being withdrawn or the loopholes narrowed. Under another proposal, the interest paid on non-resident (external) accounts by banks to non-resident or not-ordinarily resident individuals on deposits in foreign currency will now be taxable. These exemptions will cease prospectively from September 1, 2004.
The finance minister has also decided to plug "loophole" in the laws regarding gift tax. Accordingly, purported gifts from unrelated persons above a threshold limit of Rs 25,000 will now be taxed as income.
Gifts received from blood relations, lineal ascendants and lineal descendants and gifts received on certain occasions like marriage will continue to be totally exempt.Powered by 
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