Finance Minister Pranab Mukherjee on Friday announced revised tax slabs for individual tax payers and also said that the New tax rates would offer relief to 60 per cent of taxpayers.
But looking at the below comparison between the tax payable last year and the proposed one it seems that the so called “Aam Aadmi”, the middle class would not be gaining so much tax benefits as there are absolutely no tax savings for the person earning up to Rs. 3 lakh p.a. and those who are earning up to Rs. 4 lakh would end up saving only Rs. 10,000.
New tax slabs would benefit greatly to the higher middle class as compared to the Aam Aadmi, though the additional investment of Rs. 20,000/- in the infrastructure bonds would provide some relief especially to those who are interested in traditional savings tools.
Introducing Saral-2 form back is a good initiative and would make it more Saral for the tax payers to file their IT returns without hassle as the current ITR are not easy for the taxpayers to prepare & file on their own.
In order to make tax compliance process more efficient two more CPCs (Centralized Processing Centre) are proposed to be set up apart from extending “Sevottam” a pilot project at Pune, Kochi and Chandigarh to four more cities in the year. Sevottam provides a single window system for registration of all applications including those for redressal of grievances as well as paper returns.
Long awaited increase in the limits for turnover over which accounts need to be audited is also enhanced to Rs. 60 lakhs for businesses and to Rs. 15 lakhs for professionals as compared to the existing limits of Rs.40 lakh and 10 lakh respectively.
Tax Slabs for 2010-2011
The basic threshold limit for income tax exemption will remain at Rs.1.60 lakh. Under the new proposal, 10 per cent tax will be levied between Rs.1,60,001 and Rs.5,00,000, 20 per cent on incomes between Rs.5,00,001 and Rs.8,00,000 and 30 per cent above Rs.8,00,000.
Apart from this you also get Rs 20,000 additional Tax benefit if you invest in long term Infrastructure Bonds.
Tax Slabs |
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| OLD | NEW | TAX RATE |
| Upto Rs.1.6 lakh | Upto Rs.1.6 lakh | NIL |
| Rs.1.6 – 3 lakh | Rs.1.6 to 5 lakh | 10% |
| Rs.3 – 5 lakh | Rs.5 to 8 lakh | 20% |
| ABOVE Rs.5 lakh | ABOVE Rs.8 lakh | 30% |
| Tax Slabs | ||
| OLD | NEW | TAX RATE |
| Upto Rs.1.6 lakh | Upto Rs.1.6 lakh | NIL |
| Rs.1.6-3 lakh | Rs.1.6 to 5 lakh | 10% |
| Rs.3-5 lakh | Rs.5 to 8 lakh | 20% |
| ABOVE Rs.5 lakh | ABOVE Rs.8 lakh | 30% |
- Exemption Limit for Women : 1.9 Lacs
- Exemption Limit for Senior Citizen : 2.4 Lacs
How Much do you Save because of New Tax Slab?
What are your comments on New Tax Slab ? How is it going to Impact you?
This is a guest article written by Mr. Rishabh Parakh who is a Chartered Accountant and Director at MoneyPlant Consulting he had been contributing to leading newspapers like DNA & NavBharat (Money Plant Consulting is a premier outsourcing & a financial services provider which aims to offer solutions for all your financial needs and queries.)