From financial year 2011-12 onwards, the income tax slab of individuals, HUF etc. are likely to change .
At present, we are having the following slab rates (upto 2010-11)
|2008-2009||1.5 to 3 Lakhs||3 to 5 Lakhs||Above 5 Lakhs|
|2009-2010||1.6 to 3 Lakhs||3 to 5 Lakhs||Above 5 Lakhs|
|2010-2011||1.6 to 5 Lakhs||5 to 8 Lakhs||Above 8 Lakhs|
|2011-2012 (DTC Old)||1.6 to 10 Lakhs||10 to 25 Lakhs||Above 25 Lakhs|
|2011-2012 (DTC Probable)||1.6 to 10 Lakhs||10 to 15 Lakhs||Above 15 Lakhs|
Finance ministry officials said none of the changes proposed in the second discussion paper on DTC would lead to increased revenue for the government. If it sticks to the slabs proposed in DTC, its revenue collections, which showed an annual growth of 24 per cent in last five years, would be badly hit. Also there is huge gap building up between salaries of private and govt employees for the same grade of employment. Due to Unionism of Govt /Semi-Govt, the salaries of govt employees are shooting up and it affects the daily wage earner directly due to inflation and high capacity of employees drawing higher salary. So Govt is not willing to yield on taxation structure. This will put a break on fall in revenue as Govt is already facing problem in subsidies and there is compulsions coming to reduce diesel and kerosene price.
The Per capita income of India, the average amount each person earns in the country, is Rs 44,345 or Rs 3,695 a month. If the government fixed the highest bracket at Rs 25 lakh, out of 35 million taxpayers, only those earning more than Rs 2 lakh a month were required to pay tax at 30 per cent. While the rates of taxation have not changed in the last 14 years, income tax slabs have been widened from Rs 40,000-Rs 1.5 lakh in 1997 to Rs 1.6 lakh to Rs 8 lakh today — an increase of over five times in the highest slab. After widening the slabs in the first Budget of UPA-II in July 2009, Finance Minister Pranab Mukherjee surprised everyone by setting the highest slab at Rs 8 lakh. This is estimated to result in a revenue loss of Rs 26,000 crore in 2010-11. The rate decision on income will left with yearly budgets just like previous years in order to manipulate it according to needs instead of having a steady rates.
C.R. Venkata Ramani