New IT Rate Slabs after Budget -2017

The Union Finance Minister Shri Arun Jaitley in his Budget Speech ON 01/02/2017 in Lok Sabha proposed few change in the rate of personal Income-tax. The tax slab of 10% i.e from 2.5 lakh to 5 lakh has been reduced to 5 % from 10% earlier in respect of the income earned in the financial year 2017-18 assessable in the assessment year 2018-19.

In view of proposed rationalisation of tax rates for individuals in the income slab of Rs. 2,50,000 to Rs.5,00,000,it is proposed to amend section 87A so as to reduce the maximum amount of rebate available under this section from existing Rs. 5000 to Rs. 2500. It is also proposed to provide that this rebate shall be available to only resident individuals whose total income does notexceed Rs. 3,50,000.

INCOME TAX BENEFIT FOR CHANGES IN BUDGET-2017 AT VARIOUS INCOME LEVELS

\

TAX BENEFIT FOR TAXABLE INCOME OF RS 300000/-BUDGET-2017
TYPE OF PERSON	OLD TAX	NEW TAX	BENEFIT
INDIVIDUAL <60YEARS & HUF	0	0	0
SR CITIZEN 60-80 YEARS OLD	0	0	0
SR CITIZEN 80 YEARS AND ABOVE	0	0	0

Due to change in 87A person between age of 60-80 years and having income between 350001 to 399994 have to pay more tax between Rs 1 to Rs 2575/-

TAX BENEFIT FOR TAXABLE INCOME OF RS 350001/-BUDGET-2017
TYPE OF PERSON	OLD TAX	NEW TAX	BENEFIT
INDIVIDUAL <60YEARS & HUF	5150	5150	0
SR CITIZEN 60-80 YEARS OLD	0	2575	-2575
SR CITIZEN 80 YEARS AND ABOVE	0	0	0

TAX BENEFIT FOR TAXABLE INCOME OF RS 400000/-BUDGET-2017
TYPE OF PERSON	OLD TAX	NEW TAX	BENEFIT
INDIVIDUAL <60YEARS & HUF	10300	7725	2575
SR CITIZEN 60-80 YEARS OLD	5150	5150	0
SR CITIZEN 80 YEARS AND ABOVE	0	0	0

TAX BENEFIT FOR TAXABLE INCOME OF RS 500000/-BUDGET-2017
TYPE OF PERSON	OLD TAX	NEW TAX	BENEFIT
INDIVIDUAL <60YEARS & HUF	20600	12875	7725
SR CITIZEN 60-80 YEARS OLD	15450	10300	5150
SR CITIZEN 80 YEARS AND ABOVE	0	0	0

TAX BENEFIT FOR TAXABLE INCOME OF RS 800000/-BUDGET-2017
TYPE OF PERSON	OLD TAX	NEW TAX	BENEFIT
INDIVIDUAL <60YEARS & HUF	87550	74675	12875
SR CITIZEN 60-80 YEARS OLD	82400	72100	10300
SR CITIZEN 80 YEARS AND ABOVE	61800	61800	0

TAX BENEFIT FOR TAXABLE INCOME OF RS 1000000/-BUDGET-2017
TYPE OF PERSON	OLD TAX	NEW TAX	BENEFIT
INDIVIDUAL <60YEARS & HUF	128750	115875	12875
SR CITIZEN 60-80 YEARS OLD	123600	113300	10300
SR CITIZEN 80 YEARS AND ABOVE	103000	103000	0

Rates of tax For Fy 2017-18 AY 2018-19

• Normal Rates of tax

SR No	Total Income	Rate of tax
1	Up to Rs. 250000/-	Nil
2	Rs 2,50,001/- to Rs.5,00,000/-	5 % of the amount by which the total income exceeds Rs.2,50,000/-
3	Rs 5,00,001/- to Rs. 10,00,000/-.	Rs. 12,500/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-.
4	Exceeds Rs. 10,00,000/-.	Rs. 1,12,500/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-

• Rates of tax for every individual, resident in India, who is of the age of sixty years or more but less than eighty years at any time during the Financial year:

SR No	Total Income	Rate of tax
1	Up to Rs. 3,00,000/-	Nil
2	Rs 3,00,001/- to Rs.5,00,000/-	5% per cent of the amount by which the total income exceeds Rs.3,00,000/-
3	Rs 5,00,001/- to Rs. 10,00,000/-.	Rs. 10,000/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-.
4	Exceeds Rs. 10,00,000/-.	Rs. 1,10,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-

• In case of every individual being a resident in India, who is of the age of eighty years or more at any time during the financial year:

SR No	Total Income	Rate of tax
1	Up to Rs. 5,00,000/-	Nil
2	Rs 5,00,001/- to Rs. 10,00,000/-.	20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-.
3	Exceeds Rs. 10,00,000/-.	Rs. 1,00,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-

Surcharge on Income tax:

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 of the Income-tax Act, shall, in the case of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, having a total income exceeding 50 lakh rupees to 1 crore , be increased by a surcharge for the purpose of the Union calculated at the rate of 10 per cent of such income-tax:total income exceeding one crore rupees, be increased by a surcharge for the purpose of the Union calculated at the rate of fifteen per cent of such income-tax:

Provided that in the case of persons mentioned above having total income exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

Education Cess on Income tax:

The amount of income-tax including the surcharge if any, shall be increased by Education Cess on Income Tax at the rate of two percent of the income-tax.

Secondary and Higher Education Cess on Income-tax:

An additional education cess is chargeable at the rate of one percent of income-tax including the surcharge if any, but not including the Education Cess on income tax .

REBATE OF Rs 2500 FOR INDIVIDUALS HAVING TOTAL INCOME UPTO Rs 3.5 LAKH [SECTION 87A] 

In view of proposed rationalisation of tax rates for individuals in the income slab of Rs. 2,50,000 to Rs.5,00,000,it is proposed to amend section 87A so as to reduce the maximum amount of rebate available under this section from existing Rs. 5000 to Rs. 2500. It is also proposed to provide that this rebate shall be available to only resident individuals whose total income does notexceed Rs. 3,50,000.

The Union Finance Minister Shri Arun Jaitley reduced the rate of taxation from existing 10 per cent to 5 per cent for individual assesses between income of Rs 2.5 lakhs to Rs 5 lakhs. This would reduce the tax liability of all persons below Rs 5 lakh income either to zero (with rebate) or 50 per cent of their existing liability.

While presenting the General Budget 2017-18 in the Parliament today, the Union Finance Minister Shri Jaitley said that the present burden of taxation is mainly on honest tax payers and salaried employees who are showing their income correctly. Therefore, post-demonetisation, there is a legitimate expectation of this class of people to reduce their burden of taxation. The Finance Minister further said that if a nominal rate of taxation is kept for lower slab, many more people will prefer to come within the tax net. The Finance Minister made an appeal to all the citizens of India to contribute to Nation Building by making a small payment of 5 per cent tax if their income is falling in the lowest slab of Rs 2.5 lakhs to Rs 5 lakhs.

The Union Finance Minister Shri Jaitley said that the Government is trying to bring within tax-net more people who are evading taxes. So, in order to expand tax net, it is decided to have a simple one-page form to be filed as Income Tax Return for the category of individuals having taxable income upto Rs 5 lakhs other than business income. Also, a person of this category who files income tax return for the first time would not be subjected to any scrutiny in the first year unless there is specific information available with the Department regarding his high value transaction.

In his Budget Speech, the Finance Minister further said that in order not to have duplication of benefit, the existing benefit of rebate available to the same group of beneficiaries is being reduced to Rs 2500, available only to assessees upto income of Rs 3.5 lakhs. The combined effect of both these measures will mean that there would be zero tax liability for people getting income upto Rs 3 lakhs per annum. and the tax liability will only be Rs 2,500 for people with income between Rs 3 and Rs 3.5 lakhs. While the taxation liability of people with income upto Rs 5 lakhs is being reduced to half, all the other categories of tax payers in the subsequent slabs will also get a uniform benefit of Rs 12,500 per person. The total amount of tax foregone on account of this measure is Rs 15,500 crore.

In order to make good some of this revenue loss on account of this relief, a surcharge of 10 per cent of tax payable on categories of individuals whose annual taxable income is between Rs 50 lakhs and Rs 1 crore has been proposed. This is likely to give additional revenue of Rs 2,700 crore.

The Finance Minister said that the direct tax proposals for exemptions, etc. would result in revenue loss of Rs 22,700 crore but after counting for revenue gain of Rs 2,700 crore for additional resource mobilisation proposal, the net revenue loss in direct tax would come to Rs 20,000 crore.