Save Rs 44,000 next year

Today Mr. P Chidambaram presented the budget to the India Nation. As a middle class citizen I was looking for some reliefs in the Income Tax rules but was surprised when he presented the budget. As a result I would be saving Rs 44000 straightaway.

Here it is:
Suppose you have a taxable income of Rs 5 lacs. In the FY 07-08, you paid a tax of:

• Rs 1.1 to 1.5 lacs: @ 10% so Rs 4,000
• Rs 1.5 to 2.5 lacs: @20% so Rs 20,000
• Rs 2.5 to 5 lacs: @30% so Rs 75,000

To sum it up, one needed to pay Rs 99,000 as tax for a taxable income of Rs 5,00,000.

Now for FY 08-09, you need to pay:

• Rs 1.5 to 3 lacs: @ 10% so Rs 15,000
• Rs 3 to 5 lacs: @20% so Rs 40,000

To sum it up, one needs to pay only Rs 55,000 as tax for the same taxable income.

Hence you saved Rs 44,000 straightaway.

Thats a good note because its almost a salary hike in a bad phase where we expect little or no hike from the company.