Focus On Finer Points Of Your Tax Details
There are some smaller details in the budget (provided several benefits for individuals) that every individual needs to look at. These determine the manner in which the person would deal with their shoulders. It is necessary that one takes a careful liiok at how the situation should be tackled and hence here is a detailed analysis of some of the areas that need attention from the individual.
Basic Exemption Limit
The basic exemption limit has been rised but there is a need for a small bit of caution before celebrating because every person doesn’t have the benifit of the extra Rs 50,000 as basic exemption. The benifit of this extra basic exemption rise i not for the people who fall in the super senior category. The people who are below 60 years of age now have a basic exmemption limit of Rs. 2.5 lakh. Similarly those who are above 60 years till 79 years of age would get the basic exemption limit of Rs 3 lakh and those 80 and above wold have a figure of Rs 5 lakh. This means the Rs 5 lakh figure is same as that was seen in the last year and there is no increase so this category of people do not have any extra benefit that is coming in to them.
The individuals are familier with the income tax rates that are 10 per cent, 20 per cent and 30 per cent which are applicable on the various levels of income that they earn. There is not much attenntion paid to the fact that there is an additional surcharge that could be witnessed by the individual if they end up earning a higher income at the end of the day. Due to most people do not fall into this tax bracket this is usually ignored but there is a provision available whereby the individual would end up paying a 10 per cent surcharge on the total tax if their income crosses the Rs 1 crore mark. This willl actually increase the rate of tax for the individual from 30 per cent as the surcharge kicks in but it won’t affect most people as their income would be below this amount.
There is a total of 3 per cent of educational cess that has to be paid by every individual and this is calculated on the tax that they have to pay. The cess is calculated on the rate of basic tax so it would increase the final rate marginally. The cess is important because in many workings the individuals do not pay attention to this aspect and this can lead to a difference in the tax that has to be paid and the amount that has actually been discharged.