The salaried class earning up to Rs 1 lakh (Rs 100,000) will be able to save as much as Rs 9,000 annually, with Finance Minister P Chidambaram doubling the income tax exemption limit in the Budget.
However, persons earning above Rs 1 lakh will have to bear an additional tax burden of Rs 380 to Rs 6,028 annually on account of education cess on income taxes proposed in the Budget for 2004-05.
While persons earning between Rs 1 lakh and Rs 8.5 lakh will have to pay the cess at 2.0 per cent, high income groups earning more than Rs 8.5 lakh annually will have to shell out a higher cess at 10 per cent.
Although the income tax exemption limit has been raised from Rs 50,000 to Rs 1,00,000, the tax rates remain same at 20 per cent for income up to Rs 1.5 lakh and 30 per cent beyond that.
Going by the fineprint of the Budget, about 1.4 crore taxpayers will get relief ranging between Rs 500-9,000 from income tax.
Persons who were earning up to Rs 55,000 will save Rs 500 annually, while those earning between Rs 60,000 to Rs 75,000 will be relieved from paying Rs 1,000 to Rs 4,000 annually in taxes.
Persons earning Rs 75,000-1,00,000 will save about Rs 4,000 to Rs 9,000 annually.
However, a salaried person earning Rs 1.5 lakh to Rs 2 lakh will have to pay Rs 380 more annually, while it will be Rs 680 for those in the income bracket of Rs 2 lakh to Rs 3 lakh.
Those earning Rs 3 lakh to Rs 4 lakh would have to pay Rs 1,280 more in taxes, while it will be Rs 2,480 extra for those in the income bracket of Rs 4 lakh to Rs 5 lakh.
A person earning Rs 5 lakh to Rs 7.5 lakh will have an additional tax burden of Rs 3,980 annually, while those earning Rs 8 lakh to Rs 8.75 lakh would have to pay an additional Rs 4,280 to Rs 4,980.
High income group earning Rs 8.75 lakh to Rs 8.90 lakh per annum would have to pay Rs 5,080 to Rs 5,302 more, while those with an income of between Rs 8.9 to Rs 10 lakh would have to pay Rs 6,028 extra annually.
Persons earning Rs 10 to Rs 25 lakh would have to pay an additional Rs 15,928, while those earning above that would have to pay over Rs 65,428 crore (Rs 654.28 billion) annually.
About Rs 1.3 crore (Rs 13 million) taxpayers will witness a higher tax burden from this fiscal on account of the cess.
The government proposes a 25 per cent higher mop up from Income Tax at Rs 50,929 crore (Rs 509.29 billion) this fiscal compared to Rs 40,269 crore (Rs 402.69 billion) in 2003-04.
