Tuesday, March 1, 2011

Budget 2011 & Income Tax Policies

Yesterday, the finance minister of India revealed the Union Budget for the financial year 2011-2012 and there sure was a lot of buzz around it.

This article is not about what the finance minister did or did not do with respect to the Indian economics. However, what this article is about is – the impact of the budget on the income tax policies for individuals or rather salaried people.

Good News & Bad News

Well, the good news is that the standard deduction on income tax calculation has been increased to Rs. 1.8 lakhs for everyone. Though it is not a significant increase, something is better than nothing.

The bad news is that, no other component in the income tax calculation was touched. Experts were expecting the finance minister to change the limits under Section 80C and other sections that affect the final income tax liability of an individual in the union budget 2011. But unfortunately, the finance minister did not alter it.

Changes to Income Tax Policies & Slabs:

The following are the changes applicable as per the budget revealed by the finance minister of india yesterday:
• Standard Deduction increased to Rs. 1.8 lakhs for all individuals
• A new category of Tax Payers “Senior Citizens 80 yrs of age and above” has been introduced
• People over 80 yrs of age don’t have to pay tax for upto Rs. 5 lakhs and above that, the standard slabs of 20% and 30% are applicable like all individuals


Apart from this, there were no other major updates reg. the income tax policies.

Below are the revised tax slabs effective this financial year 2011-12:

For General Citizens (Men)

Amount % Tax Payable
Upto Rs. 1,80,000 Nil (0%)
Rs. 1,80,001 to Rs. 5,00,000 10%
Rs. 5,00,001 to Rs. 8,00,000 20%
Rs. 8,00,001 and above 30%

For Women

Amount % Tax Payable
Upto Rs. 1,90,000 Nil (0%)
Rs. 1,90,001 to Rs. 5,00,000 10%
Rs. 5,00,001 to Rs. 8,00,000 20%
Rs. 8,00,001 and above 30%

For Senior Citizens - 60 to 80 yrs of Age

Amount % Tax Payable
Upto Rs. 2,50,000 Nil (0%)
Rs. 2,50,001 to Rs. 5,00,000 10%
Rs. 5,00,001 to Rs. 8,00,000 20%
Rs. 8,00,001 and above 30%

For Very Senior Citizens - Above 80 yrs of Age

Amount % Tax Payable
Upto Rs. 5,00,000 Nil (0%)
Rs. 5,00,001 to Rs. 8,00,000 20%
Rs. 8,00,001 and above 30%

2 comments:

  1. @Canadian Tax Programs

    Thank you for the encouragement!!!

    ReplyDelete
  2. The National Housing Bank (NHB), the apex body of housing finance companies (HFCs) has decided to earmark Rs 5,000 crore, the amount that the Union Budget 2012 allowed it to raise through tax free infra bonds, to medium and low income housing schemes.
    Settlement Cash Structured For Flow

    ReplyDelete

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