Income tax rules have been giving people cold feet for quite a while and it was not long ago, when the rules were made more stringent giving people all the more reason to worry. But there has been a recent relaxation in the rules, much to the relief of the income tax payers. Pranab Mukherjee, the Finance Minister of the country, recently made official, the new income tax slabs in India 2012. Here is what the new slab looks like.
The tax exemption has been shifted from Rs.1.80 lacs to Rs.2 lacs. This means that the people who have been earning Rs.2 lac or less than that, per annum, need not pay anything in the form of income tax.
This is not the only change that has been made as the limit for the Rs.8 lac income per annum will also be shifted from Rs.8 lac to Rs.10 lac in the coming year. This means that the people who are earning Rs.10 lacs or above will have to pay 20% of their income in form of income tax.
Apart from this, there will be an exemption in the interest income from tax as Rs.10000. These were the basic changes that were made, and the new slab is as follows.
New income tax slab for 2012
- People who are earning between Rs.2 lac to Rs.5 lac per annum will only have to pay 10% as income tax.
- The ones who are earning anywhere between Rs.5 lac and Rs.10 lakh whill shell out 20% of their income in the form of income tax and lastly.
- The ones who are earning more that Rs.10 lac in a year will have to pay 30% of their earnings to the income tax department.
These lax in the rules have made people happy but not really satisfied as there has been terrible inflation in the past and the cost of living has drastically increased. People have been expecting higher exemptions in the income tax this year, and that is one of the main reasons that they are not really rejoicing as they feel that these exemptions are nothing very great.
At present there is a bill that is present in the Parliament and it is being debated if the tax exemption limit should be further increased to Rs.3 lac, bearing in mind, the soaring prices of commodities.
There has also been a change in the tax exemption for senior citizens has also been shifted to Rs.2.50 lac. For people who are earning more than that, that is between Rs.2,5 lac and Rs.5 lac, the income tax charge will be 10% and for the ones earning between Rs.5 lac and Rs.10 lac will be 20% and it will be 30% for those earning more than Rs.10 lac per annum.
For citizens who are above the age of 80, the tax exemption limit has been set at Rs.5 lacs, 20% for an income between Rs.5 lac to Rs.10 lac and 30% for anything above Rs.10 lac. These changes are a part of the DTC bill and if okayed, it will replace the age old Income Tax Act of 1961.
So these are the new income tax slabs in India 2012. You can go through it and decide which category you belong to, so that you know the damage that you will have to incur in the form of income tax.