Update: Click here to find out how much you save on tax in [the year starting April] 2008. compared to 2007.
Just finished the Budget speech. Income tax slabs have been changed.
For women the first slab ends at Rs. 1.8 lakhs and for senior citizens, Rs. 2.25 lakhs. Applicable from the April 1 2008 to March 31 2009.
Surcharge of 10% for earnings above Rs. 10 lakhs stays.
No change in the 3% cess either.
1. Earn a net income (after all deductions, 80Cs etc.) of Rs. 2 lakhs and you’d save Rs. 4,000 in taxes. (4K vs. 9K)
2. For Rs. 4 lakhs, you save about Rs. 34,000 as compared to last year. (35K vs 69K)
3. For Rs. 8 lakhs, your saving is Rs. 44,000. (1.45L vs. 1.89L)
4. For Rs. 12 lakhs you save about 49K. (2.91L vs. 340L) [This has a 10% surcharge so savings are higher]
Higher incomes would save about the same – about 4K a month, approximately. Net effect of this is positive for people, and hugely positive for people earning below 5 lakhs (effectively half their taxes are saved).
[Will cover rest of the budget items separately]