For salaried individuals, no changes have been made to the income tax rates proposed in 2017. However, the 3% Education Cess from the previous year has been replaced with a 4% “Health and Education Cess”. Furthermore, a standard deduction of Rs 40,000 has been introduced for all salaried individuals for transportation or medical reimbursement purposes.
The following income tax slab will help you in calculating your taxable income for all types of income slabs.
Tax applicable for individuals below 60 years
| Annual Income | Tax Rates | Health and Education Cess |
|---|---|---|
| Up to Rs.2,50,000 | Nil | Nil |
| Rs.2,50,001-Rs.5,00,000 | 5% | 4% of income tax |
| Rs.5,00,001-Rs.10,00,000 | Rs.12,500 + 20% | 4% of income tax |
| Above Rs.10,00,000 | Rs.1,12,500 + 30% | 4% of income tax |
Tax applicable for individuals over 60 years and under 80 years
| Annual Income | Tax Rates | Health and Education Cess |
|---|---|---|
| Up to Rs.3,00,000 | Nil | Nil |
| Rs.3,00,001-Rs.5,00,000 | 5% | 4% of income tax |
| Rs.5,00,001-Rs.10,00,000 | Rs.10,000 + 20% | 4% of income tax |
| Above Rs.10,00,000 | Rs.1,10,000 + 30% | 4% of income tax |
Tax applicable for individuals over 80 years and above
| Annual Income | Tax Rates | Health and Education Cess |
|---|---|---|
| Up to Rs.5,00,000 | Nil | Nil |
| Rs.5,00,001-Rs.10,00,000 | 20% | 4% of income tax |
| Above Rs.10,00,000 Rs.1,12,500 | Rs.1,00,000 + 30% | 4% of income tax |
TDS should be deducted at applicable rates as above along with surcharge and Health and Education Cess.
Income tax slabs for Financial Year 2015 – 2016
Tax applicable for men below 60 years
| Annual Income | Rate |
|---|---|
| Income up to Rs.2,50,000 | Nil |
| Income between Rs.2,50,001 – Rs.500,000 | 10% of Income exceeding Rs 2,50,000 |
| Income between Rs.500,001 – Rs.10,00,000 | 20% of Income exceeding Rs 5,00,000 |
| Income above Rs.10,00,000 | 30% of Income exceeding Rs.10,00,000 |
Tax applicable for women below 60 years
| Annual Income | Rate |
|---|---|
| Income up to Rs.2,50,000 | Nil |
| Income between Rs.2,50,001 – Rs.500,000 | 10% of Income exceeding Rs.2,50,000 |
| Income between Rs.500,001 – Rs.10,00,000 | 20% of Income exceeding Rs.5,00,000 |
| Income above Rs.10,00,000 | 30% of Income exceeding Rs.10,00,000 |
Tax applicable for Senior Citizens (Age 60 years or more but less than 80 years)
| Annual Income | Rate |
|---|---|
| Income up to Rs.3,00,000 | Nil |
| Income between Rs.3,00,001 – Rs.500,000 | 10% of Income exceeding Rs.3,00,000 |
| Income between Rs.500,001 – Rs.10,00,000 | 20% of Income exceeding Rs.5,00,000 |
| Income above Rs.10,00,000 | 30% of Income exceeding Rs.10,00,000 |
Tax applicable for Senior Citizens (Age 80 years or more)
| Annual Income | Rate |
|---|---|
| Income upto Rs.5,00,000 | Nil |
| Income between Rs.500,001 – Rs.10,00,000 | 20% of Income exceeding Rs.5,00,000 |
| Income above Rs.10,00,000 | 30% of Income exceeding Rs.10,00,000 |
The income tax slabs are proposed in the Union Budget, upon implementation, a taxpayer is expected to accurately file their income and deductions. The taxpayer can also file their income tax return in order to receive the refund for excess tax paid to the government. Recently, the Income Tax (IT) department has observed an increase in the number of people filing their taxes on time.
Frequently Asked Questions
What is a financial year?
A financial year is the year in which income is earned. It starts on April 1 and ends on March 31 of the following year.
What is an assessment year?
An assessment year is the year starting from April 1 and ending on March 31, immediately succeeding a financial year. For instance, is April 1, 2016 to March 31, 2017 is a financial year, the assessment year shall be April 1, 2017 to March 31, 2018. It is the year in which the income earned is assessed.
Who is liable to pay income tax?
Every person who earns an income above the minimum exemption limit is expected to pay tax. The word ‘person’ can refer to individuals, HUFs (Hindu Undivided Families), BOIs (Body of Individuals), local authorities, AOPs (Association of Persons), companies and other artificial judicial persons.
How much tax should I pay?
The amount of tax you should pay will be determined by the tax slab under which you fall. Persons who earn under Rs.2.5 lakh will be exempt from paying tax, while those who earn between Rs.2.5 lakh and Rs.5 lakh will be subject to 5% tax. Those who earn between Rs.5 lakh and Rs.10 lakh will have to pay 20%, while those who earn above Rs.10 lakh will have to pay 30%. Please note that these rates apply for individuals who are under 60 years of age.
What is meant by exempt income?
Exempt income, as the term might suggest, is income that is not chargeable to tax. The provisions of the Income Tax Act, 1961, offers tax exemption on certain incomes, and these incomes are known as exempt incomes.
