The 2010-11 general budget today provided considerable relief to income tax payers by stunning reform of income tax laws, the Budget 2010 income tax proposals have increased the 10% tax bracket to Rs. 5 lacs.
The present income tax slabs and rates are 10 per cent for income between Rs 1,60,001 and Rs 3,00,000, 20 per cent for income between Rs 3,00,001 and Rs 5,00,000 and 30 per cent for income above Rs 5,00,001.
In a precursor of things to come when the comprehensive Direct Tax Code goes into operation next year, the personal income tax brackets have been drastically liberalized doubtless, to ensure more compliance.
Proportionately, similar changes have been made in the taxes related to women and senior citizens aged above 65 years.
Contributions to Central Government Health Scheme (CGHS) have also been allowed as deductions within the overall ceiling for tax rebate besides contributions to health insurance schemes which are currently allowed as deductions under the Income Tax Act.
The entire opposition walked out of the Lok Sabha during the presentation of budget by finance minister Pranab Mukherjee, dubbing it "highly inflationary" as he partially rolled back the stimulus by hiking the ad velorum component of excise duty on large cars and multi-utility vehicles by two per cent to 22 per cent.
The present income tax slabs and rates are 10 per cent for income between Rs 1,60,001 and Rs 3,00,000, 20 per cent for income between Rs 3,00,001 and Rs 5,00,000 and 30 per cent for income above Rs 5,00,001.
In a precursor of things to come when the comprehensive Direct Tax Code goes into operation next year, the personal income tax brackets have been drastically liberalized doubtless, to ensure more compliance.
Proportionately, similar changes have been made in the taxes related to women and senior citizens aged above 65 years.
Contributions to Central Government Health Scheme (CGHS) have also been allowed as deductions within the overall ceiling for tax rebate besides contributions to health insurance schemes which are currently allowed as deductions under the Income Tax Act.
The entire opposition walked out of the Lok Sabha during the presentation of budget by finance minister Pranab Mukherjee, dubbing it "highly inflationary" as he partially rolled back the stimulus by hiking the ad velorum component of excise duty on large cars and multi-utility vehicles by two per cent to 22 per cent.
The new threshold are:
1. Upto Rs. 1.6 lacs per year - no tax
2. Rs. 1.6 - 5 lacs per year - 10%
3. Rs. 5 - 8 lacs per year - 20%
4. Higher - 30%
Other steps:
1. Only 2 pages in the IT filing form for individuals
2. More cases can now be appealed against
3. Rs. 20,000 tax exemption for investments in certain investment bonds. This is in addition to the Rs. 1,00,000 already allowed in certain savings instruments.
4. Exemption for contribution to the Central Government Health Scheme (CGHS).
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