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 amp="" huf="" td=""> | 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 amp="" huf="" td=""> | 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 amp="" huf="" td=""> | 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 amp="" huf="" td=""> | 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 amp="" huf="" td=""> | 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 amp="" huf="" td=""> | 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.
