Understanding Taxes

Income Tax Slab - Financial Year(FY) 2010-2011

Income Tax Slabs

Tax slabs for FY 2008-09

Tax slabs for FY 2009-10

Tax slabs for FY 2011-12

 

Tax slabs for FY 2012-13

Tax slabs for FY 2013-14

 

When calculating the income tax liability each year, the first and foremost aspect which comes across one’s mind is the tax slabs. In this year’s annual budget, the government has brought about relief for the common man by widening this tax slab from the previous years. Here is a look into the slabs for the current financial year to help you prepare your investments and income, and to be able to file your tax returns accurately in the following assessment year.

 

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Basic Tax Jargons

Financial Year, Assessment Year and Previous Year, do these commonly used income tax jargons often confuse you? This is what they mean.

 

  1. Financial Year (FY) – Duration of one year between 1st April to 31st March of the following year, in which all financial information are reported. The current financial year is 1st April 2010 to 31st March 2011.
  2. Assessment Year (AY) – The income of a particular financial year is assessed in the following financial year, which is known as the assessment year. For the current financial year, income will be assessed in the assessment year 2011-2012.
  3. Previous Year (PY) – The financial year preceding the assessment year, the income of which is assessed in the following assessment year. Assessment year 2011-2012 will assess income for previous year 2010-2011.

                 

Income Tax Slabs

 With the upward revision of the tax slabs, there would now be more savings for the consumers. Basic tax exemptions limits have been retained; however, the brackets have been broadened. Below are the income tax slabs and rates applicable for the current financial year 2010-11 and assessment year 2011-12.

Tax Slabs for Male Assesses(less than 65 years)

 

Income: up to 1.6 lakhs

No Tax

Income : 1.6 lakhs to 5 lakhs

10 %

Income : 5 lakhs to 8 lakhs

20 %

Income : above 8 lakhs

30 %

 

        

Tax Slabs for Women Assesses (less than 65 years)

 

Income : up to 1.9 lakhs

No Tax

Income : 1.9 lakhs to 5 lakhs

10 %

Income : 5 lakhs to 8 lakhs

20 %

Income : above 8 lakhs

30 %

 

  

Tax Slab for Senior Citizen

 

Income : up to 2.4 lakhs

No Tax

Income : 2.4 lakhs to 5 lakhs

10 %

Income : 5 lakhs to 8 lakhs

20 %

Income : above 8 lakhs

30 %

 

  

As a result of the widening of the tax brackets, for an individual in the bracket between Rs. 3 Lakhs to Rs. 5 Lakhs, there could now be a saving of up to Rs. 20,000. Earlier, this bracket of 10% tax rate was applicable only up to an income of Rs. 3 Lakhs. Similarly, for the tax slab of Rs.8 Lakhs and above, there could now be a saving of more than Rs.50, 000.

 

Additionally, the government has also introduced section 80CCF where investments in infrastructure funds could fetch an extra deduction of Rs 20,000.

If you are looking for Income Tax Slab for FY 2011 – 2012 which was announced in budget 2011, click here.

 

5 Easy Steps to Calculate your Tax

Calculating income tax is not any rocket science. The following 5 steps give you an idea of the process.

           

  1. Calculate your gross total income. This includes gross income from Form 16; and the taxable income from other sources.
  2. Calculate your net deductions, which may include, donations, investments and savings such as provident fund subscriptions, Life Insurance Premiums etc.
  3. Your net taxable income is gross total income minus net deductions.
  4. Apply the appropriate income tax slab to calculate your tax payable on aggregate income.
  5. Education Cess of 3% is applied on the tax payable to arrive at the total tax payable. Relief under various sections would be applied on this total tax.

               

For example: Let us consider a net taxable income of Ravi as Rs. 8, 00,000.

As a male assessee, here’s how his tax is calculated.

 

Calculation

 

Tax up to Rs. 1,60,000

Nil

Tax on Rs.1,60,000 to Rs.5,00,000 @ 10%

34,000

Tax on Rs. 5,00,000 to Rs. 8,00,000 @ 20%

60,000

Total

94,000

Educational Cess - 3% of Total Tax

2,820

Net Tax Payable

96,820

 

                                       

Find out your tax liability in less than 30 seconds using this tax calculator.

          

                   

Want to know if you are saving and investing wisely? Use this calculator and find out. Click here to use other such calculators.

                                       

 

                                                  

Useful Tax Saving Articles

Section 80C

7 Tax Saving Strategies for Salaried Individuals

6 Tax Saving Tips for Working Couples

Tax Planning

Best Tax Saving Mutual Funds

National Savings Certificates (NSC)

Post Office Monthly Income Scheme

 

 

Published Dec 02 2010




Comments

Comments

 

MADHAVAN NAIR said:

I DID NOT GO THROUGH COMPLETELY. BUT AN APPARENT LOOK IT SEEMS YOU HAVE DONE A GOOD JOB. EXCELLENT WORK. VERY INTERESTING. MAY GOD BLESS YOU. I SHALL WRITE MORE WHEN I PERSONALLY TRY TO FILL THE INFORMATION.

THANKS AND BEST REGARDS

MADHAVAN NAIR

December 6, 2010 5:31 AM
 

Srinivasan said:

Nice Article enjoyed reading it Yogi...  please make this site very robust in terms of Tax planning tips and tricks...  Much appreciated.  Also please dedicate a section for high income bracket such as >20 Lakhs and your tips for them on how to save tax.

December 11, 2010 4:13 AM
 

Rani Pradeep Kumar said:

Pls note that the slabs given for women and senior citizens  are only for resident assessees i.e. resident women and resident senior citizens , rest all fall under the slab of individuals (Men & HUF ) whether resident or not resident ...

December 29, 2010 1:32 AM
 

nidhi agarwal said:

its very good.very helpful.Also please brief about d detail of tax saving n investment procedure,.

January 4, 2011 5:16 AM
 

Ab.Qayoom Dar said:

give the details of rebate particularly housing loan

January 4, 2011 9:53 AM
 

G.S. RAO said:

article is good. But, you are not mentioned the 1.00.000 savings in the tax calculation.

January 4, 2011 7:59 PM
 

nidhi said:

A few months back there was a revision made in the tax slabs, wherein upto 2.5lakh for women were tax free..and the bracket of 5lakh to 8lakh was removed!!! i am confused, why these new revisions are not to be used! i read over a site that these new slabs are for the next year i.e. 2011-12, but in that case why did they release it so early and dint wait to announce it during the budget session in Feb 2011....can you please tell me which tax slabs are true? i want to calculate my tax liability.thanks

January 5, 2011 5:40 AM
 

suryadeep said:

Dear Nidhi

What you heard is current from Apr 2012 onwards as it's part of the Direct Tax Code being rolled out by the Govt. For this financial year this tax slab is right.

You can use this simple tool to calculate your tax liability: www.investmentyogi.com/FinancialCalculators.aspx

January 5, 2011 5:51 AM
 

Sindhu said:

I am having an LIC policy in the name of my husband. He is not taking the benefit of tax rebate on that policy. I am paying the premium for this policy and would like to know whether I can avail the tax rebate benefit of that policy on my income. Please let me know. Thanks.

January 18, 2011 12:24 AM
 

Dorwin D said:

Hi,

I have payed 50,000 in a LIC policy on 24, March 2010. That was a fixed deposit schem in lic. I didnt used tat for the financial year 2010. Can i use that policy for the financial year 2011.

Kindly Advice.

January 19, 2011 2:40 AM

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