Key highlights of Budget 2011, declared by Finance Minister Pranab Mukherjee are on February 28, 2011:
• Salaried person upto an income of Rs. 5 lakh will not have to file income tax returns. This exemption from filing will come into effect from the assessment year 2011-12.
• However, salaried person who has income from other sources like dividend, interest etc. but does not want to file returns, will have to disclose such income to his/her employer for tax deduction
• Male income tax payers exemption limit is raised from Rs. 1.60 lakh to 1.80 lakh per annum. On income between Rs. 1.60 lakh to Rs. 5 lakh will be 10%, 20% on Rs. 5 lakh to Rs. 8 lakh, and 30% on Rs. 8 lakh and above.
• Women income tax payers are not been provided any benefits and their exemption limit is been retained at 1.90 lakh per annum.
• Most benefited section has been senior tax payers as the eligibility of age for senior citizens has been reduced to 60 years from 65 years. And their tax exemption limit has been increased from Rs. 2.40 lakh to Rs. 2.50 lakh.
• The exemption limit of tax for senior citizens above the age of 80 years has been increased to Rs. 5 lakh per annum. They will have to pay 20% tax on income from Rs. 5 lakh to Rs. 8 lakh, and 30% on Rs. 8 lakh and above.
• The Form 16 issued to the salaried persons will be considered as Income Tax Return.
• A new form named “Sugam” will be introduced for small taxpayers.
• The Direct Tax Codes will come into effect from April 2012, which will not have a separate category for women tax payers. It will replace the Income Tax Act, which proposes to form the exemption limit of income to Rs. 2 lakh from present Rs. 1.60 lakh.
• Rs. 20,000 deduction will be available on investment in notified infrastructure bonds in 2011-12.
• Surcharge on domestic companies is to be reduced from 7.5% to 5%.
• Service tax rate has been retained at 10%
• Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) wage rates linked to consumer price index; will rise from existing Rs.100 per day.
• To encourage agricultural sector growth, a subsidy of 3% interest will be given to farmers in 2011-12.
• Anganwadi workers salary has been raised from Rs.1,500 to Rs.3,000.
Salary | Male | ||
Tax Last Year | Proposed Tax | Tax Savings | |
Above 65 years | Above 60 years | ||
300,000 | 2060 | 0 | 2060 |
400,000 | 12360 | 10300 | 2060 |
500,000 | 22660 | 20600 | 2060 |
600,000 | 32960 | 30900 | 2060 |
800,000 | 72100 | 70040 | 2060 |
1,000,000 | 121540 | 119480 | 2060 |
1,200,000 | 183340 | 181280 | 2060 |
1,500,000 | 276040 | 273980 | 2060 |
3,000,000 | 739540 | 737480 | 2060 |
5,000,000 | 1357540 | 1355480 | 2060 |
Salary | Female | ||
Last year | Proposed | Tax Savings | |
Above 65 years | Above 60 years | ||
400,000 | 9270 | 9270 | 0 |
500,000 | 19570 | 19570 | 0 |
600,000 | 29870 | 29870 | 0 |
800,000 | 69010 | 69010 | 0 |
1,000,000 | 118450 | 118450 | 0 |
1,200,000 | 180250 | 180250 | 0 |
1,500,000 | 272950 | 272950 | 0 |
3,000,000 | 736450 | 736450 | 0 |
5,000,000 | 1354450 | 1354450 | 0 |
Salary | Sr. Citizen | ||
Last year | Proposed | Tax Savings | |
65+ years | 60 to 79 years | ||
400,000 | 4120 | 3090 | 1030 |
500,000 | 14420 | 13390 | 1030 |
600,000 | 24720 | 23690 | 1030 |
800,000 | 63860 | 62830 | 1030 |
1,000,000 | 113300 | 112270 | 1030 |
1,200,000 | 175100 | 174070 | 1030 |
1,500,000 | 267800 | 266770 | 1030 |
3,000,000 | 731300 | 730270 | 1030 |
5,000,000 | 1349300 | 1348270 | 1030 |
Salary | Very Senior Citizen | ||
Last year | Proposed | Tax Savings | |
65+ years | 80+ years | ||
400,000 | 4120 | 0 | 4120 |
500,000 | 14420 | 0 | 14420 |
600,000 | 24720 | 0 | 24720 |
800,000 | 63860 | 37080 | 26780 |
1,000,000 | 113300 | 86520 | 26780 |
1,200,000 | 175100 | 148320 | 26780 |
1,500,000 | 267800 | 241020 | 26780 |
3,000,000 | 731300 | 704520 | 26780 |
5,000,000 | 1349300 | 1322520 | 26780 |
*Rates have been calculated on the basis of Section 80C benefit of Rs 1 lakh and Rs 20,000/- benefit if invested in Infrastructure bonds. However, the actual tax amount may vary depending on the components of ones income. |
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