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Friday, August 14, 2009

Big tax cut coming your way

Finance minister Pranab Mukherjee unveiled a roadmap for reforms in direct taxes that promises to drastically cut the tax liability of most individuals by considerably raising tax slabs. The new direct taxes code, proposed to be implemented from April 2011, aims to moderate effective tax rates in the hope that this will encourage more people to pay up.

Proposed Income Tax Rates for Individuals

Up to Rs.1,60,000

Nil

From Rs.1,61,000 to Rs.10,00,000

10 Per cent (Income exceeds Rs.1,60,000)

From Rs.10,01,000 to 25,00,000

20 Per cent (Rs.84,000 + Income exceeds Rs.10,00,000)

Above Rs.25,00,000

30 Per cent (Rs.3,84,000 + Income exceeds Rs.25,00,000)

Proposed Income Tax Rates for Women-below 65 years

Up to Rs.1,90,000

Nil

From Rs.1,91,000 to Rs.10,00,000

10 Per cent (Income exceeds Rs.1,90,000)

From Rs.10,01,000 to 25,00,000

20 Per cent (Rs.81,000 + Income exceeds Rs.10,00,000)

Above Rs.25,00,000

30 Per cent (Rs.3,81,000 + Income exceeds Rs.25,00,000)

Proposed Income Tax Rates for Senior Citizens

Up to Rs.2,40,000

Nil

From Rs.2,41,000 to Rs.10,00,000

10 Per cent (Income exceeds Rs.2,40,000)

From Rs.10,01,000 to 25,00,000

20 Per cent (Rs.76,000 + Income exceeds Rs.10,00,000)

Above Rs.25,00,000

30 Per cent (Rs.3,76,000 + Income exceeds Rs.25,00,000)