This article tells you how much extra money you would get in your pocket because of the changes made in the personal income tax slabs in the Budget 2010-2011.
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In the budget of 2010-11, the finance minister Pranab Mukherjee has |
(Ready to file your income tax return, but confused which form to use? Please read “Income Tax (IT) Return Filing – Which ITR form to use?“)
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Proposed Income tax
slabs for FY 2010-11:
Rate
Income
Men
Women
Senior
Citizens
0%
Less than
1,60,000
Less than
1,90,000
Less than
2,40,000
10%
1,60,001
to 5,00,000
1,90,001
to 5,00,000
2,40,001
to 5,00,000
20%
5,00,001
to 8,00,000
5,00,001
to 8,00,000
5,00,001
to 8,00,000
30%
8,00,001
and above
8,00,001
and above
8,00,001
and above
Income tax slabs for
FY 2009-10:
Rate
Income
Men
Women
Senior
Citizens
0%
Less than
1,60,000
Less than
1,90,000
Less than
2,40,000
10%
1,60,001
to 3,00,000
1,90,001
to 3,00,000
2,40,001
to 3,00,000
20%
3,00,001
to 5,00,000
3,00,001
to 5,00,000
3,00,001
to 5,00,000
30%
5,00,001
and above
5,00,001
and above
5,00,001
and above
Impact of this change
This change in slabs for personal income tax would positively
impact all taxpayers having an income of more than Rs. 3,00,000.
The table below illustrates the impact of this step – it has
the income tax calculated for various income levels as per the old and new
slabs. This calculation is for a male assessee who is
not a Senior Citizen, but the saving would be the same even for women
and Senior Citizens.
Income
Tax
FY09-10
Tax
FY10-11
Saving
in Tax
1,00,000
0
0
0
1,50,000
0
0
0
2,00,000
4000
4000
0
2,50,000
9000
9000
0
3,00,000
14000
14000
0
3,50,000
24000
19000
5000
4,00,000
34000
24000
10000
4,50,000
44000
29000
15000
5,00,000
54000
34000
20000
5,50,000
69000
44000
25000
6,00,000
84000
54000
30000
6,50,000
99000
64000
35000
7,00,000
114000
74000
40000
7,50,000
129000
84000
45000
8,00,000
144000
94000
50000
More than
8,00,000
-
-
50000
Analysis
- All tax payers having an income level of Rs. 3,00,000 per year or more would benefit from this change
- The benefit is relatively smaller at lower incomes, and increases as the income increases
- The maximum benefit is for people earning Rs. 8 Lakhs per year or more – these people would save Rs. 50,000 in income tax every year
Thus, the finance minister has put more money in our hands. So,
go ahead and spend it. But don’t spend it all – don’t forget to invest a decent
portion of it!
Happy investing!
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Dear Sir,
Guide me on new tax proposed on sale of property in FY 2010-2011
Abhay
Sir,
First off all thank you for wonderfull sheet on calculation of LTCG from sale of house. I have calculated my LTCG as Rs. 42 Lacs from sale of house. The period is from 1990-91 to 2009-2010. My questions are
1. Whether this LTCG will be distributed over this period for calculation of Tax?
2. Whether donations out of this LTCG to my son and daughter will be helpfull in saving tax?
3. How to save tax on this? I am planning to construct another house costing about 11 lacs.
Abhay
Dear Mr. Raagav,
Is it possible to claim using 80DDB along with form 16 for the incometax year of 2009-2010?
DTC is being slated to come in effect from 20011, it would have implication in investment planning.
It would mean proceed from PF/PPF/LIC may be taxable at the time of maturity and since these may be large amount one may have to pay tax in 20-30% slab.
Capital gains would be added to income (no more tax free long term gain on MF/Stocks).
The option for user is to plan real long term in investments which can be sold in part (like MF Units/Stocks). Even sell of house/property would attract large tax compare to what we are used to with existing tax laws.
I would appreciate if you could write on these issue in near future so that people can replan their investment strategy.
Regards,
Sunil
please E- mail income tax slab from 1990 to 2011