How Budget 2001 will change your taxes in India

While Budget 2001 has kept the tax slabs and rates for personal tax unchanged, the removal of the Kargil surcharge will lower the income tax to be paid out by taxpayers.

For example, a person with a net taxable salary of Rs 3,00,000 will pay Rs 9,600 less in assessment year 2002-03 (income earned in 2001-02) compared to assessment year 2001-02 (income earned in 2000-01).

Notably, since the FM had imposed the Gujarat surcharge earlier this month on Assessment Year 2001-02, and has kept it unchanged in the budget, this will be applicable to both years for taxpayers in the higher brackets.

However, for taxpayers with taxable income less than Rs 60,000, the Gujarat surcharge will need to be paid only for the year 2000-01.

But despite the Gujarat surcharge someone with an income of Rs 65,000 and a current tax liability of Rs 2,240 will have to pay only Rs 2,040 during the next assessment year. Those with salaries between Rs 2,00,000 and Rs 10,00,000 will make tax savings of 12.82 per cent , thanks to the removal of the Kargil surcharge.

Following would be the tax payout structure for a person with a Rs 3,00,000 taxable salary -

 

		Ass. Yr 01-02	Ass. Yr 02-03
Total Taxable Income	300,000
Amount not taxed	50,000
Amount taxed at 10% (50,000-60,000 slab)		1,000	1,000
Amount taxed at 20% (60,000-150,000 slab)		18,000	18,000
Amount taxed at 30% (150,000 and above slab)	150,000	45,000	45,000
Base Tax		64,000	64,000
With Kargil Surcharge @ 15% on Base Tax<?XML:NAMESPACE PREFIX = O />		73,600	64,000
With Gujarat Surcharge @ 2% on Base Tax		74,880	65,280
Saving			9,600

The personal tax structure across various incomes will be as follows-