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1 Mar 2005

Tax Brackests

Posted by Vijay S in Business | 8:08pm

The new budget scrapped all benefits under section 88 and Section 80L has been omitted.Investors continue to have the benefit to reduce their tax liabilities by investing the maximum sum of Rs 1 lakh.

Investments in small savings schemes, ELSS, contributions to insurance policies and pension plans etc have all been made a part of the eligible Rs 1 lakh. In the earlier tax regime, people with 5Lac or more gross income could not claim benefits under Section 88. However with the new tax regime, this is wiped out and they can avail the benefits of 1Lac scheme.

Taxable Income

Rate of tax
Upto Rs 100,000 Nil
Rs 100,000 to 150,000 10%
Rs 150,000 to 250,000 20%
Above Rs 250,000 30%

The income level for applying the 10% surcharge has been hiked from the erstwhile Rs 8.5 lakh to Rs 10 lakh at present.

This really deserves an applause for Chidambarams efforts to simplify the taxation and giving the investor an oppurtunity and chance to decide on his investment strategy irrespective of tax dependency on type of investments.


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