This is the first full budget of the third term of the Modi government, which will be presented by Finance Minister Nirmala Sitharaman. The date of presentation of the budget has been set for July 23, 2024. The taxpayers of the country are expecting from the government that they can get tax exemption. In such a situation, it is quite interesting to know how much tax was collected when the country became independent and how the changes were observed over the years.
In the 1949-50 budget, for the first time, one-fourth of the tax of 1 anna i.e. four paise was deducted on income up to Rs 10,000 i.e. one paisa. In the second slab, the tax on persons earning more than Rs 10,000 was reduced from 2 annas to 1.9 annas. Let us tell you that for the first time in independent India, income tax rates were fixed in a budget.
When there was a big change in taxes
When Finance Minister Yashwant Rao Chavan presented the 1974-75 budget, annual income up to Rs 6,000 was excluded from tax. The marginal tax rate was fixed at 70 per cent on income above Rs 70,000. The surcharge on all categories was made equal at 10 per cent. The total tax on the top slab, including income tax and surcharge, was 77 per cent. In this budget, wealth tax was increased.
Before the 1985-86 budget, there were 8 slabs in income tax, which Finance Minister Vishwanath Pratap Singh reduced to 4. The marginal tax rate was reduced from 61.875 per cent to 50 per cent. Those earning up to Rs 18,000 were made tax-free. A 25 per cent tax was imposed on those earning between Rs 18,001 and Rs 25,000 and a 30 per cent tax on those earning between Rs 25,001 and Rs 50,000. A 40 per cent tax was levied on annual income of Rs 50,001 to Rs 1 lakh. A 50 per cent tax was imposed on those earning more than Rs 1 lakh.
divided tax slabs
In the 1992-93 Budget, Finance Minister Manmohan Singh during Prime Minister Narasimha Rao’s government divided the tax slab into three parts. In the lowest slab, it was fixed at 20 per cent for those earning between Rs 30,000 and Rs 50,000, in the second, 30 per cent for those earning between Rs 50,000 and Rs 1 lakh and 40 per cent for those earning more than Rs 1 lakh. Manmohan Singh again made changes to the tax slabs during Narasimha Rao’s government. In the 1994-95 Budget, in the first income tax slab, a 20 per cent tax was imposed on income tax between Rs 35,000 and Rs 60,000; In the second slab, a 30 per cent tax was imposed on income tax between Rs 60,000 to Rs 1.2 lakh and a 40 per cent tax was imposed on income above Rs 1.2 lakh.
Finance Minister P. Chidambaram presented the budget for 1997-98, called the dream budget. He changed the tax rates from 15, 30 and 40 per cent to 10, 20 and 30 per cent. Also, people with income of 40,000 to 60,000 were kept in the 10 per cent bracket, people with income of 60,000 to 1.5 lakh were kept in the 20 per cent bracket and those above 30 per cent.
These changes occurred during the UPA era.
In the 2005-06 budget during the UPA 1 era, Finance Minister P. Chidambaram once again provided a major relief to the people of the country. He made people earning up to Rs 1 lakh tax-free. The tax was kept at 10 per cent for those earning between Rs 1 and 1.5 lakh, 20 per cent for those earning between Rs 1.5 lakh and Rs 2.5 lakh and 30 per cent for those earning above Rs 2.5 lakh.
When the 2010-11 budget came during the UPA 2 era, this time Pranab Mukherjee presented the budget and tried to provide relief to the people of the country. By making changes in the slab, people earning up to Rs 1.6 lakh were left out of the tax net. A 10 per cent tax was imposed on those earning between Rs 1.6 lakh and Rs 5 lakh, 20 per cent on those earning between Rs 5 lakh and Rs 8 lakh and 30 per cent on those earning above Rs 8 lakh.
Pranab Mukherjee also presented the 2012-13 budget and raised the zero tax bracket from Rs 1.8 lakh to Rs 2 lakh and also made some changes in the remaining tax brackets. He announced that no tax will be levied on those earning up to Rs 2 lakh. Those earning between Rs 2 lakh and Rs 5 lakh annually were placed in the 10 per cent tax slab and those earning between Rs 5 lakh and Rs 10 lakh were placed in the 20 per cent tax slab. A 30 per cent tax slab was imposed on people earning more than Rs 10 lakh.
When the Modi government presented the first budget
Budget 2014-15: This was the first budget of the Modi government. The wealth tax was abolished after the passage of the Finance Bill 2015. At the same time, Finance Minister Arun Jaitley imposed a 2 per cent surcharge on those earning more than Rs 1 crore.
In the 2017-18 Budget, Arun Jaitley had reduced the tax on people earning Rs 2.5 lakh to Rs 5 lakh from 10 per cent to 5 per cent. Under Section 87A of the Income Tax Act, 1961, the rebate was increased from Rs 2.5 lakh to Rs 3.5 lakh and reduced from Rs 5 lakh to Rs 2.5 lakh. Due to which income tax was almost abolished for those earning up to Rs 3 lakh. Also, for those earning between Rs 3 lakh and Rs 3.5 lakh, the tax was kept at Rs 2,500.
In February 2019, the Modi government presented the interim budget. This budget was presented by Piyush Goyal. He was holding the additional charge of the Finance Ministry at that time. Piyush Goyal announced tax exemption for those earning up to Rs 5 lakh. Also, the standard deduction limit was increased.
The 2020 budget was presented by Finance Minister Nirmala Sitharaman. Changes were made in the tax slabs while presenting the budget for the financial year 2020-21. In this budget, no tax was imposed on income up to Rs 2.5 lakh. While a 5 per cent tax was imposed on income between Rs 2.5 lakh and Rs 5 lakh. A 10 per cent tax was fixed on the slab of Rs 5 to Rs 7.5 lakh. A 15 per cent tax was imposed on income from Rs 7.5 lakh to Rs 10 lakh and a 20 per cent tax was imposed on income from Rs 10 lakh to Rs 12.5 lakh. Then a new tax regime was also started. In which earnings up to Rs 7 lakh were made tax-free. The corresponding tax refund was abolished.
