This piece will try to look at the numbers post budget 2010 and compare it 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 4 lakh to 8 lakh taxable income). Let’s look at actual numbers to see how much you and me stand to save post budget 2010 vis-à-vis 2009-10.
Which segment of Indian citizens has emerged the winner post budget 2010?
Reality TV 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, there’s even one where you just need to say “deal” or “no deal” and could walk away with 50 lakhs.
To be honest, at times these shows lose the “real” effect and start looking “surreal”. One of these reality shows (sic) is the annual financial exercise of the government of India. The one chance; for the Finance minister to take center stage literally- The Union Budget. Like all game 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 Mr. Shamukham Chetty in 1947), the budget has become a boring show for many.
But, that is not the topic of discussion of this article. This piece will try to look at the numbers post budget 2010 and compare it 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 4 lakh to 8 lakh taxable income). Let’s look at actual numbers to see how much you and me stand to save post budget 2010 vis-à-vis 2009-10.
A very simple way to do the comparison is to compare the income tax payable by us for 2009-10 and for 2010-11.
For Men
Men earning upto Rs 300,000 will not have any change whatsoever in their income tax. They would be paying the same tax as before. Similarly anyone with a taxable income above Rs 400 crores would be paying the same tax too! (Although I do not know how many would be there if at all there is some one!) We can thus safely assume that all men with income above Rs 300,000 will be paying lesser tax for the period 2010-11: cetirus paribus.
Now who among this group would save the most because of Pranab’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 whooping saving of 37.04%.
Similarly for women earning 500,000 the savings due to the new laws would be 39.22% and for Senior citizens earning 500,000 the savings would be a phenomenal 44.44%. Pranab surely must have some great fans in this segment!
The savings even at Rs 1,500,000 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 | Tax Payable | Savings | |
| 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 | Tax Payable | Savings | Income | Tax Payable | Savings | |||
| 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% | |
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