Personal Taxation

Rates of Income-tax

General
Rate of tax
Income Level (%)
upto Rs. 1.1 lakh -
Between Rs. 1.1 lakh & Rs. 1.5 lakhs 10
Between Rs. 1.5 lakhs & Rs. 2.5 lakhs 20
In excess of Rs. 2.5 lakhs 30

Women below 65 years

Rate of tax
Income Level (%)
upto Rs. 1.45 lakh -
Between Rs. 1.45 lakhs & Rs. 1.5 lakhs 10
Between Rs. 1.5 lakhs & Rs. 2.5 lakhs 20
In excess of Rs. 2.5 lakhs 30

Persons over 65 years

Rate of tax
Income Level (%)
upto Rs. 1.95 lakh -
Between Rs. 1.95 lakhs & Rs. 2.5 lakhs 20
In excess of Rs. 2.5 lakhs 30

Surcharge (%)
General 10
Income upto Rs. 10 lakhs -

Education Cess (%) 3

Computation of Income

Heads of Income Amt. (Rs.) Amt. (Rs.) Amt. (Rs.)

Salaries
Gross Salary 200,000
Less: Standard Deduction 14,200
185,800

Income from House Property

Annual Value
Less:
30% of Annual Value -
Interest on Housing Loan (not to exceed
Rs. 1.5 lakhs)
-
-

Income from Other Sources

Gross Total Income 185,800

Less: Deductions under Chapter VI-A
under Section 80C/80CCC/80CCD*
Eligible Investments 35,000
Deduction 35,000
under Section 80D
Eligible Sums
General
Senior Citizens
Deduction -
under Section 80G
Eligible Donations
Deduction -
35,000
Total Income 150,800
say 150,800

General
Tax on Total Income 4,160
Surcharge -
Education Cess 125
4,285

Effective Tax Rate 2.14

Women below 65 years

Tax on Total Income 660
Surcharge -
Education Cess 20
680

Effective Tax Rate 0.34

Persons over 65 years

Tax on Total Income -
Surcharge -
Education Cess -
-

Effective Tax Rate -

Key Highlights
1. Threshold limit of exemption in the case of all assessees to be increased by
Rs.10,000. Exemption limits stand revised as under:

General Rs.1.1 lakhs

Women below 65 years Rs.1.45 lakhs
Persons over 65 years Rs.1.95 lakhs

2. Deduction in respect of medical insurance premium increased to a maximum of

Rs.15,000 and in case of a senior citizen to Rs.20,000
Corporate Tax

Pre-Budget Post-Budget
% %
Domestic SME Companies (Total Income not exceeding INR 10mn)
Tax 30 30
Surcharge 10 -
Education Cess 2 3

Effective Tax Rate 33.660 30.900

Large Domestic Companies (Total Income exceeding INR 10mn)

Tax 30 30
Surcharge 10 10
Education Cess 2 3

Effective Tax Rate 33.660 33.990

Foreign SME Companies (Total Income not exceeding INR 10mn)

Tax 40 40
Surcharge 2.5 -
Education Cess 2 3

Effective Tax Rate 41.820 41.200

Large Foreign Companies (Total Income exceeding INR 10mn)

Tax 40 40
Surcharge 2.5 2.5
Education Cess 2 3

Effective Tax Rate 41.820 42.230

MAT
Pre-Budget Post-Budget
% %
Tax (as % of book profits) 10.00 10.00
Surcharge 10 10
Education Cess 2 3

Effective Tax Rate 11.220 11.330

Notes:
1. Companies enjoying tax holiday under Section 10A & 10B
(primarily IT and ITES companies) are now subject to MAT
provisions