An interesting observation!!
In addition to the cited, please also note that the exemption though increased to 3 lacs from 1 lac, the savings instruments are not the same. Even if the investments are made in such instruments (long term) these are subject to EET (exempt, exempt, TAX) category meaning liable to be taxed while withdrawing the money from such instruments upon retirement!!!!
Posted by: "ramamurthyn" ramamurthyn @ yahoo.com ramamurthyn
Mon Aug 17, 2009 9:05 pm (PDT)
Dear All
It is surprising that no thread has started discussion on New IT code that is proposed to come into effect from April 2011.
The New Income Tax code where the new slab of 10% tax upto 10 lakhs income is NOT as attractive as the headline says.
The gross income under new computation of income is much higher than the existing one for the same salary u r earning becaz, the non taxable allowance like HRA are taxable under the new regimn. In fact when I calculated my new salary under new formula I ended up with a IT liability of double of what I am paying now !!!
This new slab with this calculation procedure and other unknown formula is a cheating and not beneficial to the salaried class. Honestly existing pattern is less taxing.
Under new code of tax:
1. HRA is taxable.
2. Interest paid on Housing loan is not exempted.
3. Medical reimbursement, LTA are taxable.
4. EPF, Leave encashment and gratuity when u retire are taxable.
There many more so. U will pay more tax when u earn and u will pay tax again when u retire !!!!
As usual, this Govt has come up with an idea to fool the whole salaried class.
They will get more direct tax under this 10% slab than what they are doing now.
Finance ministry has invited suggestion and comments to : directtaxescode- rev @ nic.in
Pls rush yr reservations immediately so that Govt has a rethinking before implementing the New Code.
Thanx
n. ramamurthy
Pls rush yr reservations immediately so that Govt has a rethinking before implementing the New Code.
Thanx
n. ramamurthy
Thanks
rajesh bala
CAclubindia
