Changes in tax rates proposed in the Code
QUESTION: In the comparative chart in the Tax Forum dated September 6, 2010, personal income tax slabs for individuals need correction in that the latest (existing tax slabs for the income of the financial year 2010-11 [assessment year 2011-12] are: Individuals age less than 65 years: Upto Rs. 1.60 lakh it is nil; for Rs. 1.60-5 lakh it is 10 per cent; for Rs. 5-8 lakh it is 20 per cent; and above Rs. 8 lakh it is 30 per cent.
For women age less than 65 years basic exemption is Rs. 1.90 lakh; for Rs. 1.90-5 lakh it is 10 per cent, for Rs. 5-8 lakh it is 20 per cent and above Rs. 8 lakh it is 30 per cent.
For senior citizens age more than 65 years basic exemption is Rs. 2.40 lakh, for Rs. 2.40-5 lakh it is 10 per cent and above Rs. 5 lakh it is 30 per cent and so on.
The answer therefore needs correction.
ANSWER: What was given as existing slabs and rates relate to AY 2010-11, which is the current assessment year.
What the reader has referred to is the rate applicable for advance tax payable during the current financial year 2010-11 towards regular tax for AY 2011-12, tax for which is to be prescribed only by the Finance Act, 2011.
Ordinarily, the tax prescribed for advance tax is regularised by the Finance Act, but there are instances where they have been varied. It is in this view the rate for the current assessment year was indicated.
At any rate, Tax Forum is obliged to V. Sivashankar of Chennai for highlighting the advance tax liability for AY 2011-12 for comparison with the proposed rates in the Direct Taxes Code Bill intended to be effective from AY 2012-13.
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