Tax 2011

‘New Tax codes‘ must have triggered a new ray of hope among those salaried individuals. However, they may be disappointed to know that the finalizing and implementation of this ‘New tax codes’ may take up to 2011 which means that they have to file their IT returns in 2010 and possibly 2011 as per the previous slabs.

Just as a reminder, the previous IT slabs were as follows:

Up to Rs.160000, there is no need to file a tax return

From Rs.160001 to Rs.3 lac, a tax rate of 10% is applicable

From Rs.300001 to Rs.5 lac, a tax rate of 20% is applicable

For Rs.500001 and above, a tax rate of 30% is applicable.

The No-tax payable slot for Women’s is up to Rs.190000 and Senior citizen’s is Rs.240000.

As per the ‘New Tax Code‘, if accepted and finalized, the slabs will be as follows:

The No-Tax payable zone remains the same as above including for Women and Senior citizen

For income from Rs.160001 to Rs.10 lac, the tax liability will be 10% of the amount which exceeds Rs.160000.

For income from Rs.10000001 to Rs.25 lacs, the tax liability will be Rs.84000 plus 20% of the amount that exceeds Rs.10 lacs.

For income greater than Rs.25 lacs, Rs.3.84 lacs plus 30% of the amount that exceed Rs.25 lacs will be the tax liability.

Apart from this Tax code for Individual, the Government also plans to decrease the Direct Tax’s of the Companies from 30% to 25%.