India Budget 2010: Income Tax Rates will Please the Middle Class

It is perhaps a bit difficult to give the definition of the Middle Class in India. However, I am sure that the income tax rates announced in union budget 2010 will please the middle class people. Before anything let me give you the rates of income tax in India from now:

Until 160,000 rupees: 0%

160,000 to 500,000 rupees: 10%

500,000 to 800,000 rupees: 20%

Over 800,000 rupees: 30%

I think that the largest beneficiary will from the income group of 500,000 to 800,000 rupees. The new rates will save them a lot of money each year. The main goal is to encourage people to consume more. Also, Indian government perhaps wants that people feel more encouraged to pay tax and not try to evade it.

Indian economy is gradually coming out of the recession. Now, the companies would want that people try to consume more and this way the economy against gets rolling. The government also wants the same thing.

I am just concerned about the poor people. Most people in India do not earn 160,000 rupees per year.