Income Tax Slab 2017-18 Changes, Income Slab Slashed, Complete Details

Income Tax Slab

The finance minister has announced reduction in tax rate to 5% for the citizens in the lowest income tax slab that amount Rs 2.5 lakh to Rs 5 lakh. Income Tax Slab 2017-18 Changes are made with the intention to benefit the citizens of India. The new Section 87A rebate and the reduction in the lowest slab tax rate to 5% has slashed the income tax burden for those assessing income upto Rs 3 lakh as now the income tax for them would be zero. To get complete details regarding income slab go through the below segment of this page.

Income Tax Slab

Under Section 87A, the existing refund which is currently given to people with income up to Rs 5 lakh, is proposed to be reduced from the Rs. 5000 to Rs. 2500 for individual assesses incomes between Rs 2.5 lakh to Rs 3.5 lakh. Apart from this, tax burden for the earners between Rs 3 lakh to Rs 3.5 lakh would be just Rs 2500. For more information regarding Income Tax Slab 2017-18 Changes, scroll down.

Income Tax Slab

Those individuals who are earning income of Rs 4.5 lakh can now decrease their tax liability to zero by making use of the tax break under Section 80C combined with the proposals of the new Section 87A rebate and the reduction in the lowest slab tax rate to 5%.

The individuals, falling in the higher income tax slabs will also be able to take full benefit for this lower tax rate of 5% on income assessing between Rs 2.5 lakh and Rs 5 lakh. This indicates that those individuals in the higher tax slabs will pay lower tax by Rs 12500 per person.

Check Out! Union Budget

All the individuals who are earning between Rs 50 lakh and Rs 1 crore are liable to pay a surcharge of 10 percent on the total income tax owed by them. Those individuals who are earning above Rs 1 crore are liable to pay surcharge of 15 percent.

Statement By Sonu Iyer, Tax Partner & people advisory services leader, EY India:

“Glad fiscal prudence has prevailed over populism. Budget continues the agenda of growth for all and focus on global and India realities. The FM recognised the contribution of the salaried class to the tax revenues yet did not meet the expectation of standard deduction of this class of taxpayers. However, a tax saving for all is proposed by reducing the rate of tax from 10% to 5% for the income slab of Rs 250,000 to Rs 500,000. So for income up to Rs 300,000 no tax payable. Simplification of tax return forms for income up to Rs 500,000 provided no business income. LTCG period of land and building reduced to 2 years from 3 years. Fine print of the budget document will surely have more details.”

Proposed income-tax slabs for FY 2017-2018 (Assessment Year 2018-19)

Resident individual below the age of 60 years

Net Income Range Income Tax Rates Education Cess Secondary and Higher Educational Cess
Upto 2,50,000 Nil Nil Nil
Rs. 2,50,001 – Rs. 5,00,000 5% of (total income – 2,50,000) 2% of Income Tax 1% of income tax
Rs. 5,00,001 – Rs 10,00,000 Rs. 1,25,00 + 20% of (Total income – 5,00,000)
Above Rs. 10,00,000 Rs. 1,12,500 + 30% of (Total income – 10,00,000)

Look Out! Income Tax Amendment Bill

Resident individual 60 years to less than 80 years

Net Income Range Income Tax Rates Education Cess Secondary and Higher Educational Cess
Upto 3,00,000 Nil Nil Nil
Rs. 3,00,001 – Rs. 5,00,000 5% of (total income – 3,00,000) 2% of Income Tax 1% of income tax
Rs. 5,00,001 – Rs 10,00,000 Rs. 10,000 + 20% of (Total income – 5,00,000)
Above Rs. 10,00,000 Rs. 1,10,000 + 30% of (Total income – 10,00,000)

Resident individual 80 years and above

Net Income Range Income Tax Rates Education Cess Secondary and Higher Educational Cess
Upto 5,00,000 Nil Nil Nil
Rs. 5,00,001 – Rs. 5,00,000 20% of (total income – 5,00,000) 2% of Income Tax 1% of income tax
Above Rs. 10,00,000 Rs. 1,00,000 + 30% of (Total income – 10,00,000)

Surcharge @ 10% for taxable income between Rs. 50 lakhs to Rs. 1 Crore and @ 15% for taxable income > 1 Crore

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Income tax slab rates for the financial year 2016-17 (Assessment Year 2017-18)

1. Normal tax rates applicable to a resident individual below the age of 60 years, non-resident individual, AOP, BOI, resident or non-resident HUF, artificial juridical person.

Net Income Range Income Tax Rates Education Cess Secondary and Higher Educational Cess
Upto 2,50,000 Nil Nil Nil
Rs. 2,50,001 – Rs. 5,00,000 10% of (total income – 2,50,000) 2% of Income Tax 1% of income tax
Rs. 5,00,001 – Rs 10,00,000 Rs. 25,000 + 20% of (Total income – 5,00,000)
Above Rs. 10,00,000 Rs. 1,25,000 + 30% of (Total income – 10,00,000)

2. Normal tax rates applicable to a resident individual of the age of at least 60 years at any time during the year but at most 80 years in age.

Net Income Range Income Tax Rates Education Cess Secondary and Higher Educational Cess
Upto 3,00,000 Nil Nil Nil
Rs. 3,00,001 – Rs. 5,00,000 10% of (total income – 3,00,000) 2% of Income Tax 1% of income tax
Rs. 5,00,001 – Rs 10,00,000 Rs. 20,000 + 20% of (Total income – 5,00,000)
Above Rs. 10,00,000 Rs. 1,20,000 + 30% of (Total income – 10,00,000)

OMG! Aadhaar Card Now Mandatory For Filing Income Tax Returns

3. Normal tax rates applicable to a resident individual of the age of at least 80 years at any time during the year.

Net Income Range Income Tax Rates Education Cess Secondary and Higher Educational Cess
Upto 5,00,000 Nil Nil Nil
Rs. 5,00,001 – Rs. 5,00,000 20% of (total income – 5,00,000) 2% of Income Tax 1% of income tax
Above Rs. 10,00,000 Rs. 1,00,000 + 30% of (Total income – 10,00,000)

After making deductions under Section 80 (C) to 80 (U), the individual is liable to pay tax after adding the cess and surcharge, only if applicable

The secondary cess of 1% & education cess of 2% are estimated on the amount of tax payable separately. These two cess (education and secondary), are then summed up to the tax payable to calculate Gross tax payable amount.

On the amount of income tax, the surcharge is levied @ 15% where net income exceeds Rs 1 crore. In the case where the surcharge is levied, the cess will be levied on the tax amount plus surcharge.

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A resident individual whose net income is equal to or less than Rs 5 lakh, can access rebate under Section 87(A). The total amount of rebate under Section 87(A) is 100% of the income tax or Rs 5,000 whichever is less.

This is all about the latest news, Income Tax Slab 2017-18 Changes. To get more updated details, stay tuned with us through our web portal that is coolexample.in

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