Tuesday, July 7, 2009

New Income Tax Slabs

In the union budget for financial year 2009-10, the Finance Minister has announced new tax slabs.

Till 1,60,000 – 0%
1,60,001 – 3,00,000 – 10%
3,00,001 – 5,00,000 – 20%
Above 5,00,000 – 30%

Till 1,90,000 – 0%
1,90,000 – 3,00,000 – 10%
Remaining tax rates are same as general

Senior Citizen
Till 2,40,000 – 0%
2,40,001 – 3,00,000 – 10%
Remaining tax rates are same as general

As you can see, compared to the last change, there is a 10,000 rupees increase in the first slab across all categories, while the remaining slabs remain unchanged. This would lead to a maximum savings of 1000 rupees for a tax payer whose income falls above Rs. 1,60,000. This may not be a significant saving for many.

However the interesting thing to note is that there is no 10% surcharge for incomes above 10 lakhs. This is a welcome move because I feel progressive taxation is counter productive to an aspiring population. Eventhough these tax sops would make holes in government's revenues, I guess the government is looking to increase the expendable surplus of the populace so as to boost up the economic downturn.


mack said...

Thanks for sharing such great post, according to me Fringe Benefit Tax has been abolished so it will help all companies and the luxury bus operators who transported passengers either interstate or intra state will now be tax free.

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samiksha verma said...

Thanks for sharing good information about different aged group Income Tax Slab. Every year government introduces a new income tax slab. through this post person can Understanding the tax based on slabs.

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