Income Tax Slabs History in India

History of Income tax Slabs in India

History of Income tax Slabs in India

We all hate paying taxes, but like death taxes too are unavoidable! You may not know this but not very long ago (FY 1991-92) the minimum tax rate in India was 20% and the maximum 56%. So if you were in highest tax slab, you would more than half of your income to government, giving great incentive for not complying with tax laws and not to earn more!

Thankfully taxes have been bit rationalized, Now the high earners only need to pay one-third of their income as taxes (still high but seems low when compared historically)!

Below is the table showing the following since FY 1990-91:

  • Minimum Income for Tax
  • Lowest Tax Rate
  • Income at Which Highest Tax Rate Starts
  • Highest Tax Rate
  • Highest Tax Rate Including Surcharge
Income Tax Slabs History since FY 1990-91 in India

Income Tax Slabs History since FY 1990-91 in India

The important points to note are:
  1. Highest Tax Rate Including Surcharge has come down from 56% in FY 1990-91 to 30.9% since 2010-11 and has again gone up from 2013-14 (for income above Rs 1 Crore)
  2. The exemption limit for Income Tax has also increased more than 10 times from Rs. 22,00 in 1990-91 to Rs. 2.5 Lakhs in 2014-15
  3. Even the lowest tax rate has gone down from 20% to 10%

I hope this might have given you a feel good factor after Budget 2014!

How is India placed to other countries in Income Tax Slabs?

Below is a info-graphic from Hindustan Times showing highest Income tax slabs in developed countries like – US, UK, Netherlands, Japan, France, South Korea etc. The income tax rates in developed countries are higher than in India but it is compensated by the facilities and benefits that are given by government to their citizens. The facilities include social security for elder to free education for children, free medical facilities and much better infrastructure.

Highest Income Tax Slabs in Countries like – US, UK, Netherlands, Japan, France, South Korea, etc

Highest Income Tax Slabs in Countries like – US, UK, Netherlands, Japan, France, South Korea, Australia etc

9 thoughts on “Income Tax Slabs History in India

  1. HI SIR ,
    i had a small doubt .whether the 25000 income is refered per month or per anum ?
    Kindly verify my doubt sir

  2. Mr M P Purohit says:

    Sir, please also favour me with 20 years income tax slab details on my e mail id:[email protected] URGENTLY PLEASE.. THANK YOU.

  3. Dear Amit,
    Can you please give details for tax saving regarding payment of maid of servent.

    • I am not aware of any such deduction allowed for salaried people. In case you employee maid for commercial/business income – her salary would be deducted as business expenses

  4. Excellent information. I felt happy it is a feel good factor. FM can feel proud with this data/post. Keep it up

    • Yes! there is no doubt the taxes have become more rational than it was. But still there is scope of lot of improvement. Direct tax code was step in the right direction but it has already been modified and still its Work in progress!

  5. R MURUGAIYAN says:

    Dear Sir, I had read he report “Income Tax Slabs History in India” which gives various details from 1991. A special reuest: As I have to urgently put up a claim to IT Dept for Refund (related to previous 20 years) can you please send me the details of entire IT Slabs / Surcharge etc from 1991 upto date. It will be very much helpful.

    Thanks and kind Regards
    R. Murugaiyan
    E-Mail : [email protected]

      Your issue seems complicated and I would advice you to contact an expert on tax laws or a CA and help you file your IT returns for 20 years. In the mean time I might try to get you 20 years Income tax slab details.

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