Indian government has announced new income tax rates in budget 2010. The following are the new income tax rates in India for the financial year 2010-2011 (Assessment year: 2011-2012). These are personal tax rates and are applicable for individuals, Hindu Undivided Family (HUF), Association of Persons (AOP) and Body of individuals (BOI).
Income Tax Rates (AY-2011-2012) for For individuals, HUF,
Association of Persons (AOP) and Body of individuals (BOI)
Income Tax Slabs for Assessment Year 2011-12
(F Y 2010-11)
Income Tax Rates – Rate (%)
Up to 1,60,000
Up to 1,90,000 (for women)
Up to 2,40,000 (for resident individual of 65 years or above)
NIL
1,60,001 – 5,00,000
10
5,00,001 – 8,00,000
20
8,00,001 upwards
30
Rs. 20,000 tax exemption will be provided for investments in certain investment bonds. This is in addition to the already allowed exemption (Rs. 1,00,000) in certain savings instruments.
Tax Exemption will be given for contribution to the Central Government Health Scheme (CGHS).
The major beneficiary from these new direct tax rates are the middle class in India i.e. families with an income of Rs.5,00,000 to Rs.8,00,000. However, the budget has done nothing to control inflation and the hike in prices of petroleum products are likely to trigger further price hikes.High cost of living with high food prices are already burdening the people of India.This is likely to be accentuated further by the hikes in indirect taxes and prices of petroleum products.Hence, the benefits gained through lower personal income tax rates will be over-shadowed by the increased cost of living.
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