Income Tax liability - Budget (2008-2009)
While there is no change to the individual tax rates, the tax liability for individuals will reduce owing to a higher threshold exemption limits and revised income slabs.
| Type of tax payer | Income slabs | Tax Payable |
| Resident Senior Citizens | 0 – 2,25,000 | NIL |
| 2,25,001 – 3,00,000 | 10% | |
| 3,00,001 – 5,00,000 | 75,00 + 20% of income above 3,00,000 | |
| 5,00,001 & above | 47,500 + 30% of income above 5,00,000 | |
| Resident Women below 65 years | 0 – 1,80,000 | NIL |
| 1,80,001 – 3,00,000 | 10% | |
| 3,00,001 – 5,00,000 | 12,000 + 20% of income above 3,00,000 | |
| 5,00,001 & above | 52,000 + 30% of income above 5,00,000 | |
| Other Individuals | 0 – 1,50,000 | NIL |
| 1,50,001 – 3,00,000 | 10% | |
| 3,00,001 – 5,00,000 | 15,000 + 20% of income above 3,00,000 | |
| 5,00,001 & above | 55,000 + 30% of income above 5,00,000 |
The rates of surcharge (10 percent), education cess (two percent) and higher education cess (one per cent) have remained unchanged.
Medical Premium Deduction: The Budget seeks to partially offset this additional cost by allowing an enhanced deduction under Section 80D of the Income Tax Act, of upto Rs 30,000, instead of the current limit of Rs 15,000.
The additional benefit of Rs 15,000 is available only where the premia is paid for keeping in force the medical policy for the individual’s parents. In case the parents are senior citizens, the maximum benefit can be claimed upto Rs 35,000 (provided the amount paid towards the parent’s premia is Rs 20,000). The additional deduction would also go to reduce the tax deduction for salaried taxpayers.
Comments