Present IT Slabs and New IT Slabs | Taxable income of Ladies and Senior Citizens

February 27th, 2010| Finance.

Present IT Slabs and New IT Slabs | Taxable income of Ladies and Senior Citizens

Salaried persons have got a good benefit in the new income tax slabs released by Indian Finance Minister in 2010-11 budget. This amendment is beneficial to 60% of the tax payers. Personal income limit which don’t attract tax is retained at the same level of Rs. 1.60 lakhs. The next three slab’s range is increased. That means, for personal income till Rs. 1.60 lakhs there is no need to pay any tax. Earlier, if the personal income is between Rs. 1, 60, 001 to Rs. 3 lakhs, it would draw 10 % tax. But now, keeping the tax rate at same level, the maximum limit of the range is increased from 3 lakh to 5 lakh rupees. In the next slab, earlier, 20 % tax is collected for the personal income range of Rs. 3, 00, 001 to Rs. 5 lakhs. But now, the same tax rate applies to a maximum range of Rs. 8 lakhs.

Earlier, 30 % tax is laid on the personal income of more than Rs. 5 lakhs. In the new budget, this tax rate is applicable on the personal income more than Rs. 8 lakhs. With these new slab changes, every employee and citizen is benefited to the maximum level. Mainly, this is good news to the Central and State Government employees whose salaries have got a hike with the recommendation of concerned committees. Presently, the person who comes under the slab of Rs. 5 lakhs pays a tax of Rs. 54 thousand. With the new slabs, the same person needs to pay only Rs. 34 thousand in the next annual year as tax. So, there is a benefit of Rs. 20, 000. The persons with Rs. 7 lakhs income and Rs. 8 lakhs income are benefited with Rs. 40 thousand and Rs. 50 thousand respectively.  Overall, 60% of the tax payers are going to be benefited with the new slab system. Actually, many people were of opinion that the new tax code will be enforced from the April 1st 2011 and so there will no much difference this year. But, the tax payers are overwhelmed with the Finance minister’s decision on slab changes.

Personal income tax assesses are also benefited by another amendment. Presently, tax benefit is availed on the deposits, NSPs, PF and others till the amount of Rs. one lakh. Now, this limit is increased to Rs. 1.20 lakh. But the Rs. 20 thousand saved by this way should be invested only in the long term infrastructure bonds only. Also, donations given to the Central Government Health schemes are given tax benefits as like the health insurance policies.

Ladies up to income of Rs. 1, 90, 000 and Senior Citizens up to income of Rs. 2, 40, 000 are given tax benefits. More income than the above said will attract tax of 10, 20, and 30 percent for first slab of income less than Rs. 5 lakhs, in the second slab and third slab respectively.

Present IT Slabs

Till Rs. 1, 60, 000 No tax
Rs. 1, 60, 001 – Rs. 3, 00, 000 10 %
Rs. 3, 00, 001 – Rs. 5, 00, 000 20 %
Above Rs. 5, 00, 000 Rs. 30 %

New IT slabs

Till Rs. 1, 60, 000 No tax
Rs. 1, 60, 001 – Rs. 5, 00, 000 10 %
Rs. 5, 00, 001 – Rs. 8, 00, 000 20 %
Above Rs. 8, 00, 000 Rs. 30 %

Who are benefited with the new IT slabs?

Taxable income    (Rs.) Tax  that is to be  paid (Rs.) Tax that is going to be saved (Rs.)
Till now From now
Ladies
1, 90, 000 Nil Nil -
3, 00, 000 11, 000 11, 000 -
5, 00, 000 51, 000 31, 000 20, 000
7, 00, 000 1, 11, 000 71, 000 40, 000
8, 00, 000 1, 41, 000 91, 000 50, 000
10, 00, 000 2, 01, 000 1, 51, 000 50, 000
Senior Citizens
2, 40, 000 Nil Nil -
3, 00, 000 6, 000 6, 000 -
5, 00, 000 46, 000 26, 000 20, 000
7, 00, 000 1, 06, 000 66, 000 40, 000
8, 00, 000 1, 36, 000 86, 000 50, 000
10, 00, 000 1, 96, 000 1, 46, 000 50, 000

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