Thursday, February 25, 2010

Budget Impact on taxes: Save Rs 50 Thousand + 6.5 thousand in personal taxes

The new proposal announced today in Budget speech by pranab mukherjea provide for up to Rs 50 thousand saving for income up to Rs 8 lac. due to change in slabs. For income between Rs 3 lac and Rs 8 lac, the average reduction is 10%, across various slabs

In addition, you could save  upto ~6.5 K on additional investment in long term, government infrastructure bonds, giving a total benefit of upto 56.6 thousand

Revised Tax Slabs are as follows
  • No tax for income upto 1.6 lakh.
  • For income between 1.6 lakh - 5 lakh tax liability 10%. (old slab was Rs 1.6 to 3 lakh)
  • For income between 5 lakh - 8 lakh 20%. (old slab was Rs 3-5 lakh)
  • For income above 8 lakh 30% (old slab was Rs 5 lakh +)
  • Additional investment of 20K in infra bonds over and above Rs 1 lakh in 80C

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