Increase in income tax slabs

The present tax-free limit of Rs 1.10 lakh for non-senior men is being hiked substantially to Rs 1.50 lakh for the assessment year (AY) 2009-10 while for non-senior ladies this is being hiked from Rs 1.45 lakh to Rs 1.80 lakh.

Senior citizens will not have to worry about tax so long as their income does not overshoot Rs 2.25 lakh.

The first slab rate of 10 per cent applies on income between Rs 1,50,001 to Rs 3, 00,000; the second slab rate of 20 per cent applies on income between Rs 3, 00,001 to Rs 5, 00,000 and the maximum rate of 30 per cent on income exceeding Rs 5 lakh.


To put things in a clearer perspective let us take the case of a salaried male with an income of Rs 5 lakh. Ignoring education cess, the present present tax liability works out to Rs 99,000.

This will now come down to as low as Rs 55,000.

Thus across the board, there will be reduction in tax for every tax payer from the next assessment year. This is definitely good news and will add to the pockets which can be considered as some sort of increment that one will get.