Government Revises New Income Tax Slabs Introduced By DTC (Direct Tax Code)

When the newly proposed Income-Tax slabs were first announced to Indian mass as part of DTC (Direct Tax Code), government had to cop plenty of criticisms over being soft and lenient in taxing high-paying individuals and was even accused to be pro-rich. But now government has decided to scale down tax-reliefs promised earlier and revised the income-tax-slabs, proposed earlier in DTC (Direct Tax Code) 1st draft.

The modified Income-Tax rates and slabs are as follows:

Income Range Tax Rates
Up to Rs 2,00,000(Rs 2,50,000 for senior citizens) Nil
Rs 2,00,001 – Rs 5,00,000 10%
Rs 5,00,001 – Rs 10,00,000 20%
Above Rs 10,00,000 30%

As per this chart and comparing with the tax-slabs for financial year 2010 – 2011, the only real beneficiary of this change will be people, whose taxable income falls in the range Rs 8,00,000 to Rs 10,00,000. Earlier, they had to shell out 30% tax on incomes beyond Rs 8,00,000, now it will be reduced to 20%. DTC (Direct Tax Code) has also decided to do away with the preferential treatment given to Women and treats them at par with Men 🙂

According to government sources, this will be implemented from financial year 2011 – 2012 onwards, but you never know. When the first draft was announced, it was earlier planned to be in force from financial year 2010 – 2011 itself, but it never happened and was then pushed to next year. Let’s see, if it sees the light of day in year 2011 😉

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