Finance minister Arun Jaitley raised the exemption limit in personal income tax from Rs. 2 lakh to Rs. 2.5 lakh. He also raised the tax exemption limit for investments to Rs. 1.5 lakh from the current Rs. 1 lakh under Section 80C of the Income Tax Act.

Finance minister Arun Jaitley with MOS Nirmala Sitharaman and secretaries leave North Block to present union budget in Parliament. (HT photo/Mohd Zakir)

Finance minister Arun Jaitley, MOS and his officers briefed President Pranab Mukherjee on the main features of the union budget 2014. (Photo credit: Twitter)

Finance minister Arun Jaitley with his MOS Nirmala Sitharaman and secretaries leave North Block to present union budget 2014-15 in Parliament. (HT photo/Mohd Zakir)

Security officials guard budget copies at Parliament House as finance minister Arun Jaitley to present union budget 2014-15 in Parliament in New Delhi. (HT photo/Vipin Kumar)

Industrialists view the budget speech in New Delhi. (HT photo/Mohd Zakir)

Women express gratitude to finance minister Arun Jaitley for the e-visa announcements in the budget, in Moradabad. (PTI photo)

People watch live telecast of general budget 2014-2015 on TV sets in Allahabad. (PTI photo)

Security personnel stand guard near sacks containing the papers of the union budget 2014-15, at the parliament in New Delhi. (Reuters photo)

A man looks at the display screen on the facade of the Bombay stock exchange (BSE) in Mumbai. Modi government introduced a reform-minded budget. (AP photo)

Brokers at a stock exchange market in Kolkata on budget day. (PTI photo)

Union ministers during presentation of the budget 2014-15 in the Lok Sabha in New Delhi. (PTI photo)

Pedestrians watch the share prices ticker alongside a digital broadcast of finance minister Arun Jaitley delivering his budget speech at the Parliament, on a screen outside the BSE in Mumbai. ...

PM Narendra Modi during the presentation of the union budget in Lok Sabha. (PTI photo)

Congress president Sonia Gandhi and party vice president Rahul Gandhi during presentation of the union budget 2014-15 in the Lok Sabha in New Delhi. (PTI photo)
Not just that, the minister raised the tax deduction limit to Rs. 2 lakh from Rs. 1.5 lakh on interest for housing loans in case of self-occupied property while the public provident fund (PPF) investment limit has also been raised to Rs. 1.5 lakh from the current Rs. 1 lakh.

In a nutshell, these measures do not only mean more money in your hands, there will also be more incentives to park it in national savings certificates (NSC), five-year fixed deposits, repayment of principal amount of home loans, children’s tuition fees, specific mutual funds and life insurance premium among other things. The three income tax slabs — at 10%, 20% and 30% — however, have been left undisturbed.

“It is a good budget, as it will leave people with more money, which will offset the inflation burden to a large extent,” said Girish Vanvari, co-head, tax, KPMG. “It will channelise savings, while also leading to a lower tax burden.”

Sunil Shah, partner, Deloitte Haskins & Sells LLP, echoed a similar sentiment. “The enhancement in the personal exemption limits and in the ceiling for savings instruments and interest on house loans will provide relief to individual taxpayers,” he said.

The finance minister also raised the tax exemption limit for senior citizens from Rs. 2.5 lakh to Rs. 3 lakh.