Well, last year Finance Minister P.Chidambaram reduced the tax burden on people paying income tax by changing the tax slabs in India. This article offers information about the income tax rates in India for different categories of income tax payers such as men, women and senior citizens. It also provides details about final tax calculation, best deductible investments and other tax saving strategies for Indians. Here are the Income Tax Rates for the year 2008-2009.
Income Tax Slab 1 - Zero Tax
Male salaried individuals pay zero tax if their net taxable income is Rs.1,50,000 and below. For women the zero tax limit is Rs. 1,80,000 while for senior citizens it is Rs. 2,25,000. According to the income tax department, only individuals (both men and women) who are of the age of 65 years and above are considered to be senior citizens. By investing prudently and using salary allowances, it is possible to bring down incomes which are much larger than this to this level.
Income Tax Slab 2 - Ten Percent Tax
People earning between Rs. 1,50,001 to 3,00,000 fall in this category. Men have to pay 10 percent of the amount greater than Rs. 1,50,000 while women have to pay 10 percent of the amount between Rs. 1,80,001 and Rs. 3,00,000. Senior Citizens pay a rate of 10 percent of the amount between 2,25,000 and Rs. 3 lakhs as income tax in India.
Income Tax Slab 3 - Twenty Percent Tax
Indian Citizens earning between Rs. 3,00,001 to 5,00,000 have to pay this income tax rate. In this bracket, salaried men have to pay Rs 15,000 plus 20 percent of the amount between Rs. 3,00,000 and Rs. 5,00,000. Women pay Rs. 12,000 + 20 percent of the amount between Rs. 3 - 5 lakhs while senior citizens pay Rs. 7,500 plus 20 percent of the amount between Rs. three - five lakhs.
Income Tax Slab 4 - Thirty Percent Tax
All Indians earning a salary of above Rs. 5,00,000 fall in this category. Men have to pay Rs.55,000 plus 30 percent of the amount greater than Rs. 5,00,000. Women salaried taxpayers have to pay Rs. 52,000 + 30 % of the income more than Rs. 5,00,000 while for senior citizens it is it Rs. 47,500 plus 30 percent of the income above Rs.5 lakhs.
Income Tax Surcharge - In addition to the above income tax rates, a 10 percent surcharge (tax on tax) is applicable if the taxable income after taking into consideration all the deductions is above Rs. 10 lakh.
Education Cess - All taxes in India are subject to an education cess, which is 2 percent of the total tax payable. With effect from the assessment year 2008-09, Secondary and Higher Secondary Education Cess of 1% is applicable on the subtotal of taxable income.
These are the current income tax slabs and rates for the financial year April 2008 - March 2009. The Annual Budget is expected to be announced at the end of this month, and it is hoped that the Finance Minister Mr.P.Chidambaram introduces a new system of taxation, tax
slabs, investment and expense deductions that reduces the tax rate in India even further for next year.
Some More Articles about Saving Income Tax in India -
- Income Tax Slabs in India - 2010
- Calculating Taxable Income for Saving Tax
- Best Tax Saving Investments For Deduction
- Your Family As A Tax Saving Strategy