Union Budget 2019: The common man is eagerly awaiting the Narendra Modi government's first full Budget of the second term.
Union Budget 2019: The common man is eagerly awaiting the Narendra Modi government’s first full Budget of the second term. While the Interim Budget presented by the then FM Piyush Goyal in February announced big income tax relief for the common man, the middle-class is looking at FM Nirmala Sitharaman to take this a step further. As hopes on tinkering of tax slabs, higher basic exemption limits and Section 80C bloom, we take a look at how the income tax slabs have changed in India in the last 10 years:
The data for the past 10 years show that there has been a gradual increase in the basic tax exemption limit from Rs 160,000 in FY 2009-10 to Rs 250,000 in FY 2019-20. Apart from increase in basic exemption limit, tax relief has been passed on by reducing the rate of tax from 10% to 5% for taxpayers whose income is upto Rs 500,000 and by increasing rebate upto Rs 500,000.
Below are the demographic tables depicting the changes in slab rates and tax rates for last 10 years:
Table for Resident Individual taxpayer – Slab Rate
Notes: *The said table depicts the change in tax slab rate only for the Individuals taxpayers other than women, senior citizens from FY 2009-10 to FY 2019-20; income over and above 20% tax bracket is taxed at 30%
*We have not considered the surcharge, cess or rebate in the above table
Surcharge was introduced in FY 2013-14 at a rate of 10% on taxpayers whose income exceeds Rs 1 crore. This was introduced only for one year as per the Budget Speech of then Finance Minister in the Parliament. However, it has been seen that not only the surcharge has been retained it has been considerably increased from 10% to 15% for taxpayers having income exceeding Rs 1 crore. Additionally, surcharge at a rate of 10% was introduced from FY 2017-18 for taxpayers whose income is between Rs 50 lakhs and Rs 1 crore.
Notes: *The Surcharge is leviable only if income exceeds Rs 1 crore.
*From FY 2017-18 onwards, if Income is between Rs 50 lakh and Rs 1 crore, Surcharge is leviable at 10%
By Aditya Modani, Tax Director, People Advisory Services, EY