Income tax (individuals)
Finance minister Pranab Mukherjee has proposed new income tax slabs for individuals under the general budget 2010-11 which he presented today. These are as under:
Annual income up to Rs1.6 lakh Nil
Annual income above Rs1.6 lakh and upto Rs5 lakh 10 per cent
Annual income above Rs5 lakh and upto Rs8 lakh 20 per cent
Annual income above Rs8 lakh 30 per cent
The existing limit of Rs1 lakh on tax saving has been hiked by an amount of Rs20,000 for investment in long term infrastructure bonds as notified by the central government. Contributions to Central Government Health
Scheme are now allowed as deductions within the overall
ceiling for tax rebate, besides contributions to health insurance schemes currently eligible for deductions under the Income Tax Act.
Additionally, the rate of tax on services is being sought to be retained at 10 per cent to pave the way for introduction of Goods and Services Tax (GST). Mukherjee said that all services are not being brought under service tax at this stage, however, certain services hitherto untaxed would be brought under the service tax regime. The services would be notified separately, he said.
The minister said that the new proposals related to service taxes are expected to net additional revenue of Rs3,000 crore.