Income Tax Rates for the Financial Year April 1, 2008 to March 31, 2009

The direct taxes rates for the financial year 2008-2009 (Assessment year 2009-2010) are significantly lower than that for the financial year 2007-2008.

Threshold limit of exemption from personal income tax in the case of all assesses is Rs.150,000. The threshold limit for a resident woman assessee is Rs.180,000, while for a resident senior citizen is Rs.225,000.

I. For Individuals (includes nonresidents), HUF, AOP and BOI
1. From 1,50,000 to 3,00,000 : 10% of amount greater than Rs. 1,50,000.
2. From 3,00,000 to 5,00,000 : 20% of amount greater than Rs. 3,00,000 plus Rs. 15,000.
3. Above 5,00,000 : 30% of amount greater than Rs. 5,00,000 plus Rs. 55,000.

II. For Resident Woman (except senior citizen)
1. From 1,80,000 to 3,00,000 : 10% of amount greater than Rs. 1,80,000.
2. From 3,00,000 to 5,00,000 : 20% of amount greater than Rs. 3,00,000 plus Rs. 12,000.
3. Above 5,00,000 : 30% of amount greater than Rs. 5,00,000 plus Rs. 52,000.

III. For Resident Senior Citizen
1. From 2,25,000 to 3,00,000 : 10% of amount greater than Rs. 2,25,000.
2. From 3,00,000 to 5,00,000 : 20% of amount greater than Rs. 3,00,000 plus Rs. 7,500.
3. Above 5,00,000 : 30% of amount greater than Rs. 5,00,000 plus Rs. 47,500.
Note: For nonresident senior citizen the exemption limit is Rs. 1,50,000.

Education Cess
The total tax amount (including surcharge) is subject to an education cess at 3%.

Surcharge
A 10% surcharge (tax on tax) is applicable if the net income (after all the non-taxable allowances and deductions) is above Rs. 10 lakh. This surcharge is subject to marginal relief. The net income tax and surcharge shall not exceed the total amount payable as on income tax on income of Rs. 10,00,000 by more than the amount of total income that exceeds Rs. 10,00,000.

*Senior Citizen Saving Scheme 2004 and the Post Office Time Deposit Account added to the basket of saving instruments under Section 80C of the Income Tax Act.
*Additional deduction of Rs.15,000 allowed under Section 80D to an individual paying medical insurance premium for his/her parent or parents.

Statutory Obligation to file return (Section 139(1)).
Every individual has to furnish the return of income if his total income before allowing deduction under Chapter VI-A (that is under sections 10A, 10B, 10BA, 80C to 80U) exceeds the maximum amount which is not chargeable to income tax.

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