If people with gross annual income of Rs 6.5 lakh make investments in Provident Fund or approved equity schemes, they may not have to pay any tax, he announced.
This would mean a tax relief of approximately Rs 18,500 crore to around 3 crore tax payers, he added.
For salaried class, the standard deduction was raised to Rs 50,000 from Rs 40,000.
Goyal further said that all income tax returns will be processed within 24 hours.
Exemption on tax deducted at source on interest earned from bank, post office savings raised to 40,000 rupees from 10,000 rupees, he added.
The TDS threshold on rental income was raised from Rs 1.8 lakh to Rs 2.4 lakh.
The benefit of rollover of capital tax gains will be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to Rs 2 crore, and can be exercised once in a lifetime, Goyal said.
The finance minister said the current tax rates will continue till next year.