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Tax rates in India
How has personal taxation evolved in India?
If one were to look at the table on personal income tax rates in India, the trend is quite shocking. Imagine those who lived in the seventies paid up to 93% of their income in taxes! And to think of it, we complain that we pay high taxes. Anyway, with the continuous rationalization of tax rates, India is only moving closer to global standards when it comes to tax rates.
Year |
Exemption limit (Rs) |
Number of Rates |
Entry Rate (%) |
Peak Rate (%) |
Peak rate income (Rs) |
1949-50 |
1500 |
4 |
4.69 |
25 |
15000 |
1955-56 |
2000 |
5 |
4.93 |
26.25 |
15000 |
1960-61 |
3000 |
7 |
3.15 |
26.25 |
20000 |
1970-74 |
5000 |
11 |
11 |
93.5 |
200000 |
1974-75 |
6000 |
8 |
13.2 |
77 |
70000 |
1980-81 |
8000 |
8 |
15 |
66 |
100000 |
1985-86 |
18000 |
4 |
25 |
50 |
100000 |
1990-92 |
22000 |
4 |
20 |
56 |
100000 |
1995-96 |
40000 |
3 |
20 |
40 |
120000 |
1997-98 |
40000 |
3 |
10 |
30 |
150000 |
1998-99 |
50000 |
3 |
10 |
30 |
150000 |
1999-00 |
50000 |
3 |
10 |
33 |
150000 |
2000-01 |
50000 |
3 |
10 |
35.1 |
150000 |
2001-02 |
50000 |
3 |
10 |
30.6 |
150000 |
2002-03 |
50000 |
3 |
10 |
31.5 |
150000 |
2003-04 |
50000 |
3 |
10 |
30 |
150000 |
2004-05 |
50000 |
3 |
10 |
30 |
150000 |
2005-06 |
100000 |
3 |
10 |
30 |
250000 |
2006-07 |
100000 |
3 |
10 |
30 |
250000 |
Source: Report of the Task Force July 2004, Ministry of Finance, Govt. of India
How has corporate taxation evolved in India?
Type of company/ Year |
Domestic company (%) |
Foreign company (%) |
Surcharge (%) |
1995-96 to 1996-97 |
40 |
50 |
- |
1997-98 to 1998-99 |
35 |
48 |
- |
1999-2000 to 2001-2002 |
35 |
48 |
10 |
2002-2003 |
35 |
48 |
13 |
2003-2004 |
35 |
48 |
2 |
2004-2005 |
35 |
40 |
5 |
2005-2006 to 2006-2007 |
35 |
40 |
2.5 |
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