Thursday, February 25, 2010

New Income Tax Code for 2010 - 2011 by Pranab Mukherjee

Government on Friday, 26th Feb 2010 has proposed new income tax code for the financial year 2010 - 2011. As per the new tax code, positive modification has been introduced in tax slabs.

There will be no income tax till Rs. 1.6 lakh (1,60,000) same as before.
But there are good changes done for other slabs-

There will be only 10% tax from 1.6 lacs to 5 lacs changed from 1.6 - 3 lacs
20% tax from 5 lacs to 8 lacs changed from 3 - 5 lacs
30% tax on the income above 8 lacs.

To give infra sector a boost, additional Rs. 20,000/- tax break is given for infra bonds. Now one can invest upto Rs. 20,000/- in infrastructure bonds.

This is a positive step taken by Finance Minister Pranab Mukherjee to cheer the tax payers in the country. Share Market also welcome the budget and gained more than 2%.