QUESTION: I am a senior citizen more than 80 years of age. I want to hail the welcome benefit for raising minimum exemption limit to Rs.5 lakh for the income for the financial year 2011-12. My anxiety is whether this will be retained in Direct Taxes Code Bill, 2010, for the year starting from April 1, 2012. If it is not continued, it will be a benefit limited for a single year not available for those who have added one more year to their age.
ANSWER: Exemption limit of Rs.5 lakh will be available for senior citizens who have completed 80 years at any time during the financial year 2011-12, so that the eligibility for the relief will be available for assessment year 2012-13.
The first schedule to the Direct Taxes Code Bill, 2010, recognises minimum exemption limit of Rs.2.50 lakh for senior citizens above 65 years of age as against Rs.2 lakh for others.
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The reader is, therefore, correct on both counts. The benefit for super seniors will not be available under the Code unless the first schedule is amended before the Bill becomes law.
There have been many changes in the present Act by the time the Bill got ready by the Finance Acts, 2010 and 2011, with more amendments in prospect in the Finance Bill, 2012.
These amendments, especially the new incentives, will have to be carried over by redrafting the Bill. Presumably, it will be done.
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The better course is, however, to postpone the Bill for one more year so that a neater job can be done taking into consideration the numerous other anomalies pointed out from time to time in various quarters including those highlighted in these columns.