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What are the changes in personal income tax slabs?
|
Income Level (Rs.) |
Present Rate (%)
1 |
Proposed Rate
(%) 1 |
| Upto 100,000 |
Nil
2 |
Nil |
| 100,001
- 150,000 |
20.40 |
10.20 |
| 150,001
- 250,000 |
30.60 |
20.40 |
| 250,001
- 850,000 |
30.60 |
30.60 |
| 850,001
- 1,000,000 |
30.66 |
30.60 |
| Exceeding 1,000,000
3 |
30.66 |
33.66 |
1
- Including Surcharge.
2
- Subject to Rebate under section 88D.
3
- The surcharge is now proposed on income exceeding Rs. 10 lacs. At present it is on income exceeding Rs. 8.5 lacs.
What are the additional benefits to women & senior citizens?
The basic exemption limit for women is Rs. 125,000/-. The basic exemption limit
for senior citizens is Rs. 150,000/-.
What have we lost ?
- The standard deduction.
- Section 88 rebate from Income Tax.
- Majority of Section 80 Deduction from total income including Section 80-L which allowed a deduction of upto Rs. 15,000/- of interest income.
What have we not lost?
We can still deduct the interest on housing loan from the total income.
The following deductions are still available: - Medical Insurance Premium.
- Specified expenditure for disabled dependents.
- Expenses on medical treatment for individuals or dependents .
- Deduction in respect of interest on loans for pursuing higher studies. The section is proposed to be amended to exclude principal amount from the deduction.
- Deductions to disabled person.
What have we gained ?
New Section 80CCE has been introduced to provide for deduction to individuals from Total Income in respect of specified investments such as life insurance policy, contribution to provident funds, investments in specified small savings scheme of post office, purchase of infrastructure bonds, repayment of principal amount of housing loan (a clarification is awaited on this point) or subscription to ELSS. Whilst there is a freedom to invest in any of the eligible schemes, the overall deduction is limited to Rs. 100,000/- including the deductions available under Section 80C, 80CCC or 80CCD.
In simple words, now anyone can save tax by investing upto Rs. 100,000/-. The investment would be deducted from the total income and would save on the marginal rate of tax payable by the person on the investments upto Rs. 100,000/-.
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