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
- 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)
- 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
- 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.
- Pradhan Mantri Sneh Bandhan Yojana - July 29, 2015
- Who needs to file Income Tax Return for AY 2015-16? - July 28, 2015
- SBI Recurring Deposit Features & Interest Rate – July 2015 - July 17, 2015
- 4 Ways to generate EVC for e-verification of Income Tax Returns - July 15, 2015
- 11.25% SREI Infrastructure Finance NCD – July 2015 – Should you Invest? - July 13, 2015
- ITR Form 2A – The new IT Return Form for AY 2015-16 - June 25, 2015
- Home Loans: HFC vs Banks? Choose Wisely - April 24, 2015
- Changes in ITR Forms for AY 2015-16 - April 17, 2015
- What is the Maximum Income Tax You can Save for FY 2015-16? - April 16, 2015
- How good is Credit card against Fixed Deposit? - April 15, 2015