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Taxpayers may gain up to Rs 44,000 per year

Posted on 29 February 2008,    
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Taxpayers may gain up to Rs 44,000 per year

 

                       

 

 

 

 

A great news for the salaried with the increase in tax slabs .The news gets even better for those in the higher tax brackets. The adjustment for the income tax slabs has been done in such a way that people in the high income category – say above Rs 2.5 lakhs per annum - stand to gain even more.

 

Under the new income tax slabs, a person’s tax liability would come down to Rs 55,000 translating into  tax savings of Rs 45,000 per year which indeed is  a huge amount of money.

 

The minimum exemption limit has gone up by Rs 40,000.

In the prevailing regime the 30% tax bracket starts from Rs 2.5 lakh onwards. In the latest budget, the 30% tax bracket only starts from Rs 5 lakhs onwards. This revision will certainly do  magic for the high income earners. And, all this is not taking into account the impact of deduction on account of Section 80C.

 

The huge jump in interim slabs means that many people will just fall out of the highest tax slab into the tax slab below after they start claiming deductions they are entitled to under Section 80C.

 

For a person whose taxable income after all deductions was Rs 2.5 lakh, tax savings could be around Rs 14,000; for someone with an income of Rs 5 lakh, it could be around Rs 45,000; for someone with a salalry income of Rs 7.5 lakh, tax saving would be Rs 44,000 and for those earning Rs 10 lakh, tax saving would be as much as Rs 45,000 per year. Taxpayers may gain up to Rs 44,000 per year



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