Individual tax payers will save only Rs 1,000 more a year following the government raising the tax exemption threshold by Rs 10,000 to Rs 1,60,000, whereas the benefit for senior citizens (65 years and above) will be higher at Rs 1,500.

Finance Minister Pranab Mukherjee in his Budget speech for 2009-10 raised the tax-exempted income limit by Rs 10,000. Men would now have to pay taxes on income above Rs 1.6 lakh while women have to pay it on income over Rs 1.9 lakh.

However, senior citizens have been given a relief of Rs 15,000, so they would have to pay taxes on income over Rs 2.4 lakh per annum.

High income individuals earning Rs 10 lakh or more, however, would be the biggest beneficiary as the 10 per cent surcharge has been done away with, which would help them save a minimum of more than Rs 20,000 a month.

Those under the ambit of wealth tax would also save at least Rs 15,000 a year as threshold for charging of this tax has been doubled to Rs 30,00,000.

Till now individual with a net wealth exceeding Rs 15,00,000 were paying one per cent as wealth tax every year. Commenting on the move, legal expert Aseem Chawla from Amarchand Mangaldas said, "Reduction in personal tax rates more particularly removal of surcharge is a welcome measure and step in the direction for rationalising tax rates."

Following are the amount of tax payable at various income levels (prevailing levels in the brackets):

Income - Tax payable a year

Rs 1 lakh - Nil (Nil)

Rs 2 lakh - Rs 4,000 (Rs 5,000)

Rs 3 lakh - Rs 14,000 (Rs 15,000)

Rs 4 lakh - Rs 34,000 (Rs 35,000)

Rs 5 lakh - Rs 54,000 (Rs 55,000)

Rs 6 lakh - Rs 84,000 (Rs 85,000)

Rs 7 lakh - Rs 1,14,000 (Rs 1,15,000)

Rs 8 lakh - Rs 1,44,000 (Rs 1,45,000)

Rs 9 lakh - Rs 1,74,000 (Rs 1,75,000)

Rs 10 lakh - Rs 2,04,000 (Rs 2,05,000)

Those earning more than Rs 10 lakh would save a minimum of more than Rs 20,000, due to abolishment of 10 per cent surchage on those earning more than Rs 10 lakh, in addition to the Rs 1,000 benefit due to higher exemption limit.