Under the tax scheme proposed in the budget today, someone with a taxable income of Rs. 800,000 will enjoy a tax relief of nearly 35 percent -- he/she will pay Rs. 96.8 k as opposed to last year's 148.3 k.
For someone with an income of Rs. 500 k, the tax relief works out to 40 percent!
But, but ...
For people earning 160 k to 300 k, the tax relief is a nice round figure of zero percent.
In other words, a vast majority of tax payers (with incomes less than 300 k) will not see a single rupee of tax benefits, while their richer siblings will see pretty fabulous savings -- as much as Rs. 51,500 for those earning 800 k and more!
This would be a cruel thing to do even in a normal year. But this year is one that has seen pretty high inflation rates -- especially for food.
This is too bizarre for a government that claims to work for the Aam Aadhmi!
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Data: See the table in this blog post for the data. The quantum of tax relief rises from zero percent (for incomes up to Rs. 300k) before maxing out at about 40 percent for 500k. From there on, it keeps falling steadily to, for example, about 35 percent at 800 k, and about 25 % at 1 million.