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)
