Budget 2015: How over Rs 10 lakh a year can be tax free

In his Budget speech, Finance Minister Arun Jaitley said that a taxpayer enjoys deductions of up to Rs 4.44 lakh a year. But he missed a few deductions commonly available to taxpayers. If one adds up all these deductions, exemptions and tax-free reimbursements, an income of more than Rs 10 lakh a year can escape the tax net.

Even middle class pays more tax now

Tax as a percentage of income has steadily risen in the past five years for almost all taxpayers.



1) Calculation hasn't taken into account tax deductions and exemptions because investments vary across individuals.

2) Incomes have been adjusted for inflation using the cost inflation index. Tax has been calculated on that income as per tax slabs and rates prevailing in a financial year.

3) If deductions are taken into account, the effective tax for low and midincome taxpayers would be lower.