Does the high taxes on your (high)salary bother you much ?? Do you think, government is extracting an unfair pie out of your hard earned money ?? Well, somebody in upper echelon may have heard your cribs and developed some sympathy for you, partly because they spared a thought for the spiraling cost-of-living all across India and party because they don’t have to pay taxes on their black-money/bribes(their real source of income, apart from their salary oops peanuts) and honest poor civilians have to shell out money on their white-money as well, Bahut Nainsafi Hai Re 🙂
Yes, government is doing away with the existing Income-Tax Act, enacted way back in 1961, when most of us were not even born. Starting with financial year 2011-2012, they are replacing it with something called as Direct Tax Code (DTC). Although, some experts and social activists have criticized this move in government as pro-rich, Direct Tax Code(DTC) is intended to provide some much-needed relief to middle-class families, especially people belonging to higher income brackets.
Here is the comparison chart for different income-slabs. Do the maths yourself and see how how much money you are going to save in 20111-12.
|Income Range||Tax rates for 2010-11||Tax rates for 2011-12|
|Less than Rs 1,60,000(1,90,000 for women and 2,40,000 for senior citizens)||Nil||Nil|
|Rs 1,60,001 – Rs 2,00,000||10%||Nil (2,00,000 for men as well as women and 2,50,000 for senior citizens)|
|Rs 2,00,001 – Rs 5,00,000||10%||10%|
|Rs 5,00,001 – Rs 8,00,000||20%||10%|
|Rs 8,00,001 – Rs 10,00,000||30%||10%|
|Rs 10,00,001 – Rs 25,00,000||30%||20%|
|Above Rs 25,00,000||30%||30%|
Clearly, the common man and lower middle class (annual income < 5 Lakh) don’t benefit at all, but people belonging to upper middle class and upper class is set to enjoy much of the benefits, after this new tax regime comes into force. Earlier, these high-income individuals were paying 30% tax on incomes above 8 lakhs, but now they have to pay only 10% tax for 8-10 lakhs and 20% for 10 to 25 lakhs. Only when your income crosses beyond 25 Lakhs, you stand not to get any benefits out of this new tax regime. But then, if your income is > 25 lakhs, you already would not be bothered by your taxes, Right 😉
Update : Government has decided to revise these income tax slabs. More details regarding the same can be found at