Which segment of Indian citizens has emerged the winner post-Budget 2010?
Reality television shows have become a big part and parcel of Indian television as well as Indian society. Shows where you get to answer questions and become an overnight crorepati (millionaire), there's even one where you just need to say 'deal' or no deal' and could walk away with Rs 50 lakh (Rs 5 million).
To be honest, at times these shows lose the 'real' effect and start looking 'surreal'. One such 'reality show' is the annual financial exercise of the government of India. The one chance for the finance minister to take centrestage: the Union Budget. Like all shows, the Budget too has winners and losers.
Of course, over the last 76 episodes of this show (76 Budgets have been presented since the first one was presented by Shamukham Chetty in 1947), the Budget has become a boring affair for many.
So, here we take a look at the numbers post-Budget 2010 and compare them with the tax laws prevailing in 2009-2010 to see which part of the Indian junta will laugh its way to the bank in 2010-11.
There have been countless discussions on how the Budget is pro-middle-middle class (the repetition of middle is intentional to define a new creed: the people in the Rs 4 lakh to Rs 8 lakh taxable income).
Let's look at actual numbers to see how much you and me stand to save post Budget 2010-11 vis-a-vis 2009-10.
A very simple way to do this is to compare the income tax payable by us for 2009-10 and for 2010-11.
For Men
Men earning up to Rs 300,000 will not have any change whatsoever in their income tax payment. They would be paying the same tax as before.
Similarly, anyone with a taxable income above Rs 400 crore (Rs 4 billion) would be paying the same tax too! (Although I do not know how many Indians would figure in that category, if at all there is someone!) We can thus safely assume that all men with income above Rs 300,000 will be paying lesser tax for the period 2010-11, all other factors or things remaining the same.
Now who among this group would save the most because of Finance Minister Pranab Mukherjee's new tax slabs? A back of the napkin calculation will tell us that people having a taxable income of Rs 500,000 will be paying a tax of Rs 34,000 in 2010-11 as against Rs 54,000 in 2009-2010. A saving of 37.04%!
Similarly for women earning Rs 500,000, the savings due to the new laws would be to the extent of 39.22%. And senior citizens earning Rs 500,000, savings would be a phenomenal 44.44%!
The finance minister surely must have gathered some great fans in this segment!
Savings even at an income level of Rs 15,00,000 -- for all the three groups -- is a decent 14%.
The tables below illustrate the exact percentage of savings for all the three groups.
|
Men | |||
|
Income (Rs) |
Tax Payable (Rs) |
Saving | |
|
Old Slab |
New Slab |
% | |
|
161,000 |
100 |
100 |
0.00% |
|
250,000 |
9,000 |
9,000 |
0.00% |
|
300,000 |
14,000 |
14,000 |
0.00% |
|
400,000 |
34,000 |
24,000 |
29.41% |
|
450,000 |
44,000 |
29,000 |
34.09% |
|
500,000 |
54,000 |
34,000 |
37.04% |
|
550,000 |
69,000 |
44,000 |
36.23% |
|
600,000 |
84,000 |
54,000 |
35.71% |
|
750,000 |
129,000 |
84,000 |
34.88% |
|
800,000 |
144,000 |
94,000 |
34.72% |
|
850,000 |
159,000 |
109,000 |
31.45% |
|
900,000 |
174,000 |
124,000 |
28.74% |
|
950,000 |
189,000 |
139,000 |
26.46% |
|
1,000,000 |
204,000 |
154,000 |
24.51% |
|
1,050,000 |
219,000 |
169,000 |
22.83% |
|
1,100,000 |
234,000 |
184,000 |
21.37% |
|
1,150,000 |
249,000 |
199,000 |
20.08% |
|
1,200,000 |
264,000 |
214,000 |
18.94% |
|
1,250,000 |
279,000 |
229,000 |
17.92% |
|
1,300,000 |
294,000 |
244,000 |
17.01% |
|
1,350,000 |
309,000 |
259,000 |
16.18% |
|
1,400,000 |
324,000 |
274,000 |
15.43% |
|
1,450,000 |
339,000 |
289,000 |
14.75% |
|
1,500,000 |
354,000 |
304,000 |
14.12% |
|
Women |
|
Senior Citizens |
| ||||||
|
Income (Rs) |
Tax Payable (Rs) |
Saving % |
|
Income (Rs) |
Tax Payable (Rs) |
Saving |
| ||
|
Old Slab |
New Slab |
|
Old Slab |
New Slab |
% | ||||
|
191,000 |
100 |
100 |
0.00% |
251,000 |
100 |
100 |
0.00% | ||
|
250,000 |
6,000 |
6,000 |
0.00% |
275,000 |
2,500 |
2,500 |
0.00% | ||
|
300,000 |
11,000 |
11,000 |
0.00% |
300,000 |
5,000 |
5,000 |
0.00% | ||
|
400,000 |
31,000 |
21,000 |
32.26% |
400,000 |
25,000 |
15,000 |
40.00% | ||
|
450,000 |
41,000 |
26,000 |
36.59% |
450,000 |
35,000 |
20,000 |
42.86% | ||
|
500,000 |
51,000 |
31,000 |
39.22% |
500,000 |
45,000 |
25,000 |
44.44% | ||
|
550,000 |
66,000 |
41,000 |
37.88% |
550,000 |
60,000 |
35,000 |
41.67% | ||
|
600,000 |
81,000 |
51,000 |
37.04% |
600,000 |
75,000 |
45,000 |
40.00% | ||
|
750,000 |
126,000 |
81,000 |
35.71% |
750,000 |
120,000 |
75,000 |
37.50% | ||
|
800,000 |
141,000 |
91,000 |
35.46% |
800,000 |
135,000 |
85,000 |
37.04% | ||
|
850,000 |
156,000 |
106,000 |
32.05% |
850,000 |
150,000 |
100,000 |
33.33% | ||
|
900,000 |
171,000 |
121,000 |
29.24% |
900,000 |
165,000 |
115,000 |
30.30% | ||
|
950,000 |
186,000 |
136,000 |
26.88% |
950,000 |
180,000 |
130,000 |
27.78% | ||
|
1,000,000 |
201,000 |
151,000 |
24.88% |
1,000,000 |
195,000 |
145,000 |
25.64% | ||
|
1,050,000 |
216,000 |
166,000 |
23.15% |
1,050,000 |
210,000 |
160,000 |
23.81% | ||
|
1,100,000 |
231,000 |
181,000 |
21.65% |
1,100,000 |
225,000 |
175,000 |
22.22% | ||
|
1,150,000 |
246,000 |
196,000 |
20.33% |
1,150,000 |
240,000 |
190,000 |
20.83% | ||
|
1,200,000 |
261,000 |
211,000 |
19.16% |
1,200,000 |
255,000 |
205,000 |
19.61% | ||
|
1,250,000 |
276,000 |
226,000 |
18.12% |
1,250,000 |
270,000 |
220,000 |
18.52% | ||
|
1,300,000 |
291,000 |
241,000 |
17.18% |
1,300,000 |
285,000 |
235,000 |
17.54% | ||
|
1,350,000 |
306,000 |
256,000 |
16.34% |
1,350,000 |
300,000 |
250,000 |
16.67% | ||
|
1,400,000 |
321,000 |
271,000 |
15.58% |
1,400,000 |
315,000 |
265,000 |
15.87% | ||
|
1,450,000 |
336,000 |
286,000 |
14.88% |
1,450,000 |
330,000 |
280,000 |
15.15% | ||
|
1,500,000 |
351,000 |
301,000 |
14.25% |
1,500,000 |
345,000 |
295,000 |
14.49% | ||
1 lakh = 100,000
