Doubts over I-T exemptions
The Central Board of Direct Taxes grants relaxation in the E-filing of Income Tax
The announcement of Nirmala Sitharaman saying that those earning up to Rs 12 lakh will not have to pay any tax is being seen as a very big bonanza for the middle-class people.
Hyderabad: The announcement of Nirmala Sitharaman saying that those earning up to Rs 12 lakh will not have to pay any tax is being seen as a very big bonanza for the middle-class people.
But, experts say that one will have to wait till the bill is introduced to really understand the fine print.
Does the tax exemption of up to Rs 12 lakh income mean that a salaried person earning Rs 15 lakh will be taxed only on the remaining Rs 3 lakh?
Does the tax exemption of up to Rs 12 lakh income mean that a salaried person earning Rs 15 lakh will be taxed only on the remaining Rs 3 lakh? May not be. The exemption limit exists only for those earning up to Rs 12 lakh. Those with higher taxable income must follow the slab-wise taxation process.
As part of the taxation process, the Rs 15 lakh income will be broken down and the first Rs 4 lakh will be tax-free.
A rate of 5% will be applicable on the next Rs 4 lakh (Rs 20,000) under the Rs 4-8 lakh slab. In the Rs 8-12 lakh slab, another Rs 4 lakh will be taxed at 10% (Rs 40,000). The remaining Rs 3 lakh falls in the Rs 12-16 lakh slab, attracting a rate of 15%, which calculates to Rs 45,000. This adds up to Rs 1,05,000 - which will be the total liability on a total taxable annual income of Rs 15 lakh. However, only the bill to be introduced next week or so will present the real picture.
