Tax Rules and Slabs

RulesTax essentials for Individuals

Tax Rates The income tax rates are:

Taxable Income for Men

Up to Rs. 1,80,000 1,80,001 to 5,00,000 5,00,001 to 8,00,000 800,001 and above

2011-12

Rate

Nil 10% 20% 30%

Taxable Income for Women

Up to Rs. 1,90,000 1,90,001 to 5,00,000 5,00,001 to 8,00,000 800,001 and above

Rate

Nil 10% 20% 30%

(i) Education Cess of 2% & additional Secondary Education Cess 1% is to be levied on the aggregate of income tax where applicable.

Tax deductions and rebates As per new provision of tax deduction at source (TDS) under the Income Tax Act 1961 effective from April 1, 2010, TDS at higher of the prescribed rate or 20% will be deducted on all transactions liable to TDS, where the Permanent Account Number (PAN) of the deductee is not available. Deduction under Section 80C in respect of prescribed contributions to savings instruments for e.g. insurance premium, Provident Fund, PPF, NSC, etc continues. Investment in “term deposit” having a term of five years or more with a ‘scheduled bank’ will be eligible for deduction under section 80C only if such “term deposit” is in accordance with the scheme framed and notified by the Central Government in the Official Gazette. The aggregate deduction under section 80C however, cannot exceed Rs. 1,00,000 under any circumstances. The limit on deduction under section 80CCC with respect to contribution to a pension plan with an Indian insurance company has been increased from Rs. 10,000 to Rs. 1,00,000. However, the total of tax deduction under sections 80C, 80CCC and 80CCD (contribution to the pension scheme of the Central Government) will be limited to Rs. 1,00,000 in every case. To clarify, this amendment only allows an individual to choose one or more investments qualifying for tax deduction within the overall deductible limit of Rs. 1,00,000. Deduction in respect of subscription to long-term infrastructure bonds (80CCF) - In computing the total income of an assessee, being an individual...