No Standard Deduction?
Posted: Wed Dec 08, 2010 8:58 pm
I have a question.
Say I earn INR 1,50,000 in the year 2009-10 and no other income. For 2009-10, for men, there is no tax liability for income upto 1,60,000. So for an income of Rs 1,50,000 I will owe no taxes at all.
However if I earn INR 1,70,000 then it seems that the ENTIRE Rs 1,70,000 will be taxed at the rate of 10%. Is this correct?
If this is correct then the tax free amount applies ONLY if your total income is below the limit. The minute you cross that limit then all your income is taxed.
In the US, everyone gets a certain amount of Standard Deduction - this amount is subtracted from your total income and what's left is your taxable income (lets assume there are no other subtractions or additions).
So it looks like in India there really is no Standard Deduction. (I know you can claim deductions under various sections but thats not the same as the Standard Deduction).
My confusion is that I was thinking that if my total income is 170,000 then my taxable income is 170,000 minus 160,000 ie 10,000.
Could someone please confirm? Thank you !!!
Say I earn INR 1,50,000 in the year 2009-10 and no other income. For 2009-10, for men, there is no tax liability for income upto 1,60,000. So for an income of Rs 1,50,000 I will owe no taxes at all.
However if I earn INR 1,70,000 then it seems that the ENTIRE Rs 1,70,000 will be taxed at the rate of 10%. Is this correct?
If this is correct then the tax free amount applies ONLY if your total income is below the limit. The minute you cross that limit then all your income is taxed.
In the US, everyone gets a certain amount of Standard Deduction - this amount is subtracted from your total income and what's left is your taxable income (lets assume there are no other subtractions or additions).
So it looks like in India there really is no Standard Deduction. (I know you can claim deductions under various sections but thats not the same as the Standard Deduction).
My confusion is that I was thinking that if my total income is 170,000 then my taxable income is 170,000 minus 160,000 ie 10,000.
Could someone please confirm? Thank you !!!