New Delhi: In a major Rs 26,000 crore bonanza, Finance Minister Pranab Mukherjee on Friday announced changes to tax structure giving substantial benefit to individual and corporate tax payers.
While there would be no tax for income up to Rs 1.6 lakh, a tax of 10 per cent would be levied for income up to Rs 5 lakh, 20 per cent for up to Rs 8 lakh and 30 per cent beyond that level.
In addition, he announced that investment up to Rs 20,000 in long term infrastructure bonds would get the exemptions of over and above the existing Rs one lakh.
As per the existing structure, there is no tax on income up to Rs 1.6 lakh, 10 per cent is levied on income up to Rs 3 lakh, 20 per cent up to Rs 5 lakh and 30 per cent thereafter.
Mukherjee also reduced surcharge on corporate tax from 10 per cent to 7.5 per cent. He had already done away with surcharge on income tax last year.
However, the Finance Minister raised minimum alternate tax (MAT) to 18 per cent from the current 15 per cent on the book profits of the companies that are not coming under the tax net because of various exemptions.