Tax slabs decide the rate of income tax levied on total income of various section of society- men, women, corporates, etc.
Tax slabs decide the rate of income tax levied on total income of various section of society- men, women, corporates, etc. The slabs change almost every year keeping in mind the inflation and with the hope of leaving some money in the hands of common people.
2014- Arun Jaitley
Arun Jaitley in his budget speech in July 2014 proposed to increase personal income tax exemption limit by Rs 50,000 i.e from Rs 2 lakh to Rs 2.5 lakh in the case of individual taxpayers who are below the age of 60 years. A similar proposal was made to increase exemption limit of senior citizens from Rs 2.5 lakh to Rs 3 lakh. The education cess for all taxpayers proposed to continue at 3 percent.
To encourage domestic investment in long term savings, he proposed to increase the investment limit under section 80C of the Income-tax Act from Rs 1 lakh to Rs 1.5 lakh.
2014- P Chidamabaram
P Chidambaram in his 2014 interim-Budget speech did not propose to make announcements regarding changes to tax laws. However, he proposed certain changes in some indirect tax rates.
2013- P Chidamabaram
P Chidambaram in his 2013-14 budget speech mentioned the constrained economy and said that there is little room to raise tax rates.
“The current slabs were introduced only last year. Hence, I am afraid, there is no case to revise either the slabs or the rates. Besides, even a moderate increase in the level of threshold exemption will mean that hundreds of thousands of tax payers will go out of the tax net and the tax base will be severely eroded,” he said in the speech.
The minister, however, gave some relief to the tax-payers in the first bracket of Rs 2 lakh to Rs 5 lakh and proposed a tax credit of Rs 2,000 to every person with total income upto Rs 5 lakh. He also imposed a surcharge of 10 per cent on people with taxable income above Rs 1 crore per year, who he mentioned in his speech are 42,800 in number.
2012- Pranab Mukherjee In 2012, Pranab Mukherjee in his budget speech said that DTC will not be effective from this year, as he mentioned in his previous year’s speech. He, however, proposed to introduce the DTC rates for personal income tax.
The exemption limit for the general category of of individual taxpayers has been raised from Rs 1,80,000 to Rs 2,00,000, which would provide tax relief upto Rs 2,000 to every taxpayer in this category. The proposed personal income tax slabs are shown below in the graph:
Income upto Rs 2 lakh: Nil
Income between Rs 2 lakh- Rs 5 lakh: 10%
Income between Rs 5 lakh- Rs 10 lakh: 20%
Income above Rs 10 lakh: 30%
A proposal to allow individual taxpayers, a deduction of upto Rs 10,000 for interest from savings bank accounts was also proposed along with a deduction of upto Rs 5,000 for preventive health check-up.
2011- Pranab Mukherjee
In 2011, Pranab Mukherjee in his budget speech admitted limiting his direct tax proposals to initiatives that required urgent attention. He also indicated that the DTC (Direct Taxes Code) is under the consideration of Parliament and is proposed to be effective from April 1, 2012.
Unlike 2010 when he provided relief to individual taxpayers by broadening the tax slabs, in 2012 he provided uniform relief of Rs 2000 to every taxpayer of general category. “I propose to enhance the exemption limit for the general category of individual taxpayers from Rs 1,60,000 to Rs 1,80,000 this year,” he said in his speech.
While there wasn’t much for general taxpayers, he gave special attention to senior citizens by reducing the age limit from 65 years to 60 years and enhancing the tax exemption limit from Rs 2,40,000 to rs 2,50,000. He also created a new category of Very Senior Citizens for 80 years and above, who will be eligible for a higher exemption of Rs 5 lakh.
Exemption in income-tax slabs is on everyone’s wishlist for upcoming Budget 2015-16 that FM Arun Jaitley would be presenting on February 28, 2015. A hike in taxable amount from 2.5 to 3 lakh for adults under 60 years would leave more money in the hands of general public.