New Delhi, Feb 28: There will be no change in the rates of personal income tax or corporate income tax.
Announcing this in the Lok Sabha today (Feb 28, 2006) while presenting the Budget proposals for 2006-07, Finance Minister P Chidambaram described it as good news and said that no new taxes are being imposed. He also announced abolition of One-by-Six scheme under the Income Tax Act obliging certain categories of persons of file returns.
Responding to the demand for tax exemption on fixed deposits of certain tenure, the Finance Minister proposed to include investments in fixed deposits in scheduled banks for a term of not less than five years in Section 80 C of the Income Tax Act. He also proposed to remove the limit of Rs 10,000 in respect of contribution to certain pension funds in Section 80 CCC, subject to the overall ceiling of Rs 100,000.
The Finance Minister also proposed to remove the exemption under Section 10(23G), which he said, is not relevant when interest rates are moderate.