Expected Increase in Tax Rates – Impact on Salaried Class

As per the news reports, instead of broadening the tax base and collecting taxes from undocumented retail / wholesale, agriculture sector, Government is considering to increase tax rates applicable to salaried individuals from 35% to 45% incase of monthly salary exceeding 500,000.

Attached computation shows the impact on monthly salary of individuals and the amount of increment that will offset this impact of increase in tax. Any increase / adjustment on account of annual inflation adjustment will be over and above this increase.