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Friday, February 29, 2008

Budget 2008: Income Tax Slabs Changed
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.

Savings:
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]

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Deepak Shenoy 2/29/2008 10:35:00 AM
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5 Comments:

tax slab structure has been corrected (an not marginally like last year), but I am more worried about this farmer loan write off. I would have him rather talk about infrastructure.

Come elections and FM can't think anything but populist.
Blogger himanav, at Feb 29, 2008 1:48:00 PM  
himanav, you looks like salaried (i am too).

a farmar would have spoken like this - i am writing on behalf of him as no farmer worth his salt would have been on internet reading Deepak's blog ;)

farmers are subsidized in some way (and not marginally like last year), but i am more worried about this tax slab structure change. I would have him rather talk about health care in villages.
Anonymous Nilesh, at Feb 29, 2008 3:46:00 PM  
Good, Prompt analysis Deepak. All the media outlets (online) I have been surveying have been just parroting the line about Rs/- 4000 tax savings. None of them have yet put of the slab -wise savings as done by you. Goes again to show the relevance/efficiency of the non-traditional media in an internet age. keep up the good [voluntary :-)] work!
Anonymous Anonymous, at Feb 29, 2008 3:49:00 PM  
I am quite happy with the TAX slabs for the salaried people but for senior citizen it is 225000 where as there are not much user to have the benifit
Anonymous Anonymous, at Mar 20, 2008 8:39:00 PM  
Hi All, I am quite happy with the new budget as I come under the range of people earning less than 5LPA. So, really happy as I will be saving almost all the tax I paid last year.
Blogger neha, at May 5, 2008 1:49:00 PM  

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