Thursday , August 17 2017

Income Tax Slabs: Here Are New Tax Rates Applicable From April 2017

income tax

Bringing some happiness to the individual tax payers, Finance Minister Arun Jaitley reduced the income tax rate to 5 percent for individuals having taxable income between Rs 2.5-Rs 5 lakh compared to 10 percent earlier. In the meantime, Mr Arun Jaitley increased the tax burden of people having taxable income between Rs 50 lakh-Rs 1 crore by imposing an additional surcharge of 10 percent on the 30 percent tax amount which was already there to offset the revenue loss to the exchequer.

Here is the new Income Tax slabs post-Budget 2017-18 which will come into effect from April 1, 2017(A.Y. 2018-19):

General Category (for person up to 60 years age)

In the general category- person up to 60 years of age- tax will be applicable if income is more than Rs 2.5 lakh. For income of Rs 0 to Rs 2.5 lakh no tax will be applicable. A tax of only 5 percent will be applicable if income is between Rs 2.5 to 5 lakh. Further, the income tax rebate of up to Rs 5,000 which was earlier given for taxable income up to Rs 5 lakh, has been reduced to Rs 2,500 and it will be available for taxable income of up to Rs 3.5 lakh. It means if an individual has a taxable income of Rs 3 lakh, his net tax charge will be zero (tax @5% on Rs 1 lakh is Rs 2,500 minus rebate of Rs 2,500)

Income Tax
Up to Rs 2.5 lakh Nil
Rs 2,50,001 lakh-Rs 5 lakh 5%
Rs 500,001 lakh-Rs 10 lakh 20%
Rs 1000,001 lakh-Rs 10 lakh 30%

For income between Rs 5 to 10 lakh, a tax of 20 percent will be applicable and for income above Rs 10 lakh, a tax rate of 30 percent will be applicable.

ALSO SEE: Budget 2017 Highlights

Though, people having taxable income of more than Rs 50 lakh but less than Rs 1 crore, a new surcharge of 10 percent will be imposed along with the tax of 30 percent. For instance, if an individual has a taxable income of Rs 55 lakh, his tax liability will now increase from Rs 15.19 lakh to Rs 16.57 lakh (income tax of Rs 14.62 lakh plus the surcharge of Rs 1.46 lakh and education & higher education cess of Rs 48,263). If taxable income is more than Rs 1 crore, then the surcharge will increase to 15 percent of tax plus education and higher education cess of 3 percent. However, on taxable incomes where surcharges are applicable, taxpayers get the benefit of marginal relief, if applicable.

Senior citizens (for person between 60-80 years age)

For senior citizens falling in the tax range of Rs 0 to Rs 3 lakh, no tax will be applicable. For income between Rs 3 to Rs 5 lakh, a tax rate of 5 percent will be applicable. The tax rate and surcharge will be same as general category for income between Rs 5 to Rs 10 lakh and above Rs 10 lakh

Income Tax
Up to Rs 3 lakh Nil
Rs 3,00,001 lakh-Rs 5 lakh 5%
Rs 500,001 lakh-Rs 10 lakh 20%
Rs 1000,001 lakh-Rs 10 lakh 30%

Super senior citizens (for person above 80 years age)

For people aged above 80 years, no tax will be applicable for income up to Rs 5 lakh. A tax rate of 20 percent and 30 percent will be applicable for income between Rs 5 lakh and Rs 10 lakh and Rs 10 lakh and above respectively as in the case of general category.

Income Tax
Up to Rs 5 lakh Nil
Rs 500,001 lakh-Rs 10 lakh 20%
Rs 1000,001 lakh-Rs 10 lakh 30%
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