Friday, 16 March 2012

Union Budget 2012-13 - Tax Slabs

M-Pics
Tom, Dick and Harry are there 3 friends working for an IT company.

Tom –  Software Engineer and earns salary of 5 Lakh p.a.

Dick – Senior Software Engineer and earns salary of 8 Lakh p.a.

Harry – Manager and earns salary of 12 Lakh p.a.
Well these friends were eagerly waiting for Union Budget 2012-2013. They got the news that Finance Minister has increased the exemption limit and also revised the income tax slabs. They were curious to know how much impact they would have due to this change.
Below chart shows the current Tax, New Tax and Savings for Tom, Dick and Harry.  

Salary
current Tax
New Tax
Saving/Year
Tom
5 Lakh
32000
30000
2000
Dick
8 Lakh
92000
90000
2000
Harry
12 Lakh
212000
190000
22000

I am not sure how Tom and Dick reacted but Harry to some extent had reasons to smile. Take Away: Harry the Manager who was rich became richerJ.
Here is the comparison of current and new Tax slabs.
Tax Slab
Current
New Budget
              Nil
upto 1.8 Lakh
upto 2.0 Lakh
10%
1.8  to 5.0 Lakh
2.0 - 5.0 Lakh
20%
5.0 to 8.0 Lakh
5.0 - 10 Lakh
30%
> 8.0 Lakh
>10.0 Lakh


The new budget has something common for Tom, Dick and Harry. Interest earned up to 10,000 per year is tax Free.
What is your say on budget? Are you Happy?
Note: The scope of this article is limited and does not capture other details/changes that are made.

2 comments:

Kiran said...

"Interest earned up to 10,000 per year is tax Free."


This is only for savings account interest right? If yes, it is very strange. The FM wants people to invest money into equity etc but still encouraging keeping money in savings bank?

WealthUCreate said...

Kiran, you are rigth... If you see at micro level, you get to know FM has given you butter of worth 1 RS and Taking Ghee worth 2 RS. Its unfortunate that people with low salaries have almost nill benefits.

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