New income-tax slabs?

I wish this were true in FY2008-09 itself...

Ref: Economic Times

The government is considering a hike in the income-tax exemption limit and a rejig in slabs. North Block is busy making the first drafts of a possible tax restructuring as far as direct taxes go. Corporate taxpayers, too, may be in for some pleasant surprises, as the government is toying with options like lowering of overall tax rate or doing away with surcharge. The political developments, which signal an early election, could have a large bearing on these decisions. Finance minister P Chidambaram also has the elbow room, with direct taxes showing a buoyant growth of over 40%. The tax exemption limit may be raised from Rs 1,10,000 to Rs 1,50,000. The government had hiked the limit by Rs 10,000 in the last budget. But with the price rise in the backdrop and a possible early election, a further increase in the limit could be on the cards, to give some relief to small taxpayers. A demand to raise the exemption limit has come not only from the Left parties, but also some senior leaders within the Congress. The government has already expanded the basket of products eligible for the exemption in this category by bringing in a senior citizen scheme and a five-year post office time account. There is a likelihood of investments in dedicated infrastructure funds or infrastructure bonds enjoying the same status. A rejig in income slabs is also not ruled out. Sources said with the increase in the income-tax exemption limit, a rejig might be on the cards. At present, an income slab of Rs 1,10,000-1,50,000 attracts a tax rate of 10% while a slab of Rs 1,50,001-2,50,000 attracts a tax rate of 20%. Income above Rs 2,50,001 attracts a tax rate of 30%. These slabs may be pushed upwards, with the income slab of Rs 1,50,001 attracting a 10% tax rate and more than Rs 5,00,000 attracting 30% tax rate.

Income tax slabs for FY2007-08

According to the Finance Act, 2005 income-tax is required to be deducted under section 192 of the Income-tax Act, 1961, from income chargeable under the head "Salaries" for the financial year 2007-2008 (i.e. assessment year 2008-2009) at the following rates:

I) In case of every individual other than the individual referred to in item II and III below:

Total Income (Rs.) ------ Rate
1,10,000 to 1,50,000 -----10%
1,50,000 to 2,50,000 -----4,000 + 20%
Above 2,50,000 ----------24,000 + 30%

II) In case of women employees below 65 years of age:
Total Income (Rs.) ------Rate
1,45,000 to 1,50,000 ----10%
1,50,000 to 2,50,000 ----500 + 20%
Above 2,50,000 ---------20,500 + 30%

II) In case of senior citizens:
Total Income (Rs.) ------Rate
1,95,000 to 2,50,000 ----20%
Above 2,50,000 ---------11,000 + 30%

A) Surcharge on Income-tax: Surcharge on income tax on all firms and companies with a taxable income of Rs.1 crore or less will get removed.
B) Surcharge on T.D.S. on the payment other than salaries: The amount of income tax deducted in accordance with the provision of Chapter XVII B shall be increased by a surcharge calculated.
In the case of every individual, HUF, association of persons and body of individuals, whether incorporated or not, at the rate of ten per cent of such tax where the income or the aggregate of such income paid or likely to be paid and subject to the deduction, exceeds rupees ten lakh. In the case of every firm, artificial judicial person & domestic company, at the rate of ten percent of such tax.In the case of every company other than domestic company, at the rate of two and half per cent of such tax.
C) Education Cess: An additional surcharge called as ‘Education cess’ shall be levied at the rate of three percent on the amount of tax deducted inclusive of surcharge as stated in paras ‘A’ and ‘B’ above.