Are you going to be filing a return for the first time this year? Have you just started your 1st job? Are you a beginner as they say, when it comes to tax and the complications behind it? You are not alone. Tax is not everyone’s cup of tea. We give you a snapshot of the Income Tax rate in India, beginner’s style. That is all the information minus the boring bits. Here is what you would want to plan for, come 31 March 2012.
Change in Income Tax rates
If FY 11-12 is not going to be the first year that you are going to file an Income Tax return, then you may have a vague idea of the tax rate or the ‘tax slabs’. For FY 12-13, there have been proposed changes to the tax slabs. Let’s take a look at what’s been revised and by how much.
Which category do you fall in?
If you are a resident of India, for the purpose of Income Tax rate slabs you can fall under any of the following 4 categories: Resident Senior Citizens above 60 years of age, Resident Senior Citizens above 80 years of age, Resident Women or Any other Resident individual. Previously, the ‘Resident Senior Citizens above 80 did not exist as a category.
Income Tax Slabs
Income Tax Slabs for Resident Individuals/HUF/AOP/BOI and others
|
Income Range (Rs.) |
Tax Rate (%) |
|
Up to Rs. 1,80,000 |
Nil (Exempt) |
|
Rs. 1,80,001 to Rs. 5,00,000 |
10% |
|
Rs. 5,00,001 to Rs. 8,00,000 |
20% |
|
Above 8,00,000 |
30% |
Income Tax Slabs for Resident Women
|
Income Range (Rs.) |
Tax Rate (%) |
|
Up to Rs. 1,90,000 |
Nil (Exempt) |
|
Rs. 1,90,001 to Rs. 5,00,000 |
10% |
|
Rs. 5,00,001 to Rs. 8,00,000 |
20% |
|
Above 8,00,000 |
30% |
Income Tax Slabs for Resident Senior Citizens above 60 years of age
|
Income Range (Rs.) |
Tax Rate (%) |
|
Up to Rs. 2,50,000 |
Nil (Exempt) |
|
Rs. 2,50,001 to Rs. 5,00,000 |
10% |
|
Rs. 5,00,001 to Rs. 8,00,000 |
20% |
|
Above 8,00,000 |
30% |
Income Tax Slabs for Resident Senior Citizens above 80 years of age
|
Income Range (Rs.) |
Tax Rate (%) |
|
Up to Rs. 5,00,000 |
Nil (Exempt) |
|
Rs. 5,00,001 to Rs. 8,00,000 |
20% |
|
Above 8,00,000 |
30% |
Highlights of Income Tax Return in India
So we’ve given you a snapshot of the Income Tax rate with a few fancy tables. But what does this mean for you? Here are a few highlights.
- The threshold for Income Tax exemption limit for Resident Individuals / HUF / AOP / BOI and others has been revised from Rs. 1,60,000 to Rs. 1,80,000.
- The tax slabs for women remains unchanged
- The threshold for Income Tax exemption limit for Resident Senior Citizens above 60 years of age has been revised from Rs. 2,40,000 to Rs. 2,50,000.
- A new Income Tax bracket has been proposed for Resident Senior Citizens above 80 years of age. The threshold for Income Tax exemption limit for this category is Rs. 5,00,000.
- In the proposed system, Rs. 200 will be a minimum tax saving in your Income Tax than the previous year.
We hope that this gives you a bird’s eye view of the Income Tax rate and its corresponding slabs. So be prepared for year ending 31 March 2012 and get the ball rolling in planning your income, savings and investments. Happy Tax filing!