From a mind boggling 97.75 per cent as the highest income tax rate and 11 tax slabs, to 30 per cent as the highest rate and three slabs, India and its taxpayers have come a long way in the last 70 years since the country gained independence. Vishwanath Pratap Singh restructured the tax structure by reducing the number of income tax slabs from eight to four. The highest marginal rate of income tax on personal incomes decreased from 61.875 per cent to 50 per cent. Those in the first slab earning Rs 40,000 to Rs 60,000 paid a tax of 10 per cent, 20 per cent in the slab of Rs. The Bill had proposed an annual income tax exemption limit at Rs 2 lakh, and levying 10 per cent tax on income between Rs 2 lakh and Rs 5 lakh, 20 per cent on Rs 5-10 lakh, and 30 per cent for incomes above Rs 10 lakh.

Source: Economic Times January 31, 2018 05:27 UTC