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Surcharge burden on personal income goes down

Team NetScribes

The finance minister has scrapped the all earlier surcharges on personal income tax, and has proposed an anticipated 'Quake-Tax'.

The new surcharge of 2 per cent is leviable on incomes above Rs 60,000.

"With the earlier surcharges gone, one would have to pay considerably lower tax than before," says Sriharsha Thyagarajan of Mohan Sriharsha and Associates, a chartered accountancy firm.

To cite an example, if a person's income is Rs 200,000, he would be charged Rs 34,000 as tax and an additional Rs 4,080 as surcharge.

However, now, with the changed surcharge structure, he would have to pay the same amount of tax plus the Quake Tax contribution of Rs 680, which is a saving of Rs 3,400.

Further, the rebate for employees having an income of Rs 100,000 or less stands at 30 per cent - up by 10 per cent under Section 88 of the I-T Act.

All perquisites will now be included in the taxable salary of the assessee at the cost borne by the employer.

"The value of the perquisite will be added to the salary of the person. However, car and house perquisite structures remain the same," said Sriharsha.

Also, the interest on loans for buying a self occupied property, allowed as a deduction under the head 'Income from house property', has been increased from Rs 100,000 to Rs 150,000.

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