Commerce for IAS – Income Tax Slab Rates for A.Y. 2017-18

Commerce for IAS – Income Tax Slab Rates for A.Y. 2017-18

Income Tax Rates for A. Y. 2017-18 

(As Per Finance Act 2016)

INDIVIDUAL RESIDENT (AGED BELOW 60 YEARS)

Income SlabsTax Rates
(i)Where the taxable income does not exceed Rs. 2,50,000/-.NIL
(ii)Where the taxable income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/-.10% of amount by which the taxable income exceeds Rs. 2,50,000/-.
Less : Tax Credit u/s 87A – 10% of taxable income upto a maximum of Rs. 5,000/-.
(iii)Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-.Rs. 25,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
(iv)Where the taxable income exceeds Rs. 10,00,000/-.Rs. 125,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

 

SENIOR CITIZEN (Individual resident who is of the age of 60 years or more but below the age of 80 years at any time during the previous year)

Income SlabsTax Rates
(i)Where the taxable income does not exceed Rs. 3,00,000/-.NIL
(ii)Where the taxable income exceeds Rs. 3,00,000/- but does not exceed Rs. 5,00,000/-
Less : Tax Credit u/s 87A – 10% of taxable income upto a maximum of Rs. 2000/-
10% of the amount by which the taxable income exceeds Rs. 3,00,000/-.
Less : Tax Credit u/s 87A – 10% of taxable income upto a maximum of Rs. 5,000/-.
(iii)Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-Rs. 20,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
(iv)Where the taxable income exceeds Rs. 10,00,000/-Rs. 120,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

 

SUPER SENIOR CITIZEN (Individual resident who is of the age of 80 years or more at any time during the previous year)

Income SlabsTax Rates
(i)Where the taxable income does not exceed Rs. 5,00,000/-.NIL
(ii)Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
(iii)Where the taxable income exceeds Rs. 10,00,000/-Rs. 100,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Calculation of Income Tax Rebate

The Finance Act, 2016 has given extra tax benefit to the middle class taxpayers. If your net taxable income is less than Rs 5 lakh, you enjoy the rebate of Rs 5000. The rebate of 5000 would deducted from your total tax. Please note you have to apply this rebate just before adding the cess. The cess is calculated after deducting Rs 5000.

The Tax Calculation: An Example

Suppose Pankaj earns 15 lakh gross salary in a year. After the exemptions and deduction, his net taxable income comes 11 lakh. This 11 lakh is subject to the tax.

From this 11 lakh, initial 2.5 lakh becomes tax free.

From the remaining 8.5 lakh another 2.5 lakh us subject to 10% tax i.e. 25000/-

Now Pankaj has 6 lakh Rupees. From this amount the Rs 5,00,000 is subject to 20% tax rate.

6,00,000 – 5,00,000 (20% tax) = 1,00,000

The remaining 1 lakh rupees would be subject to 30% tax.

Total Tax liability = 25,000+ 1,00,000+30,000 = 1,55,000

Now we have to charge cess on this tax. The cess is 3% of the tax.

1,55,000 *3/100 = 4,650

Hence, Total Tax (incl. cess)  = 1,55,000+4,650 = 1,59,650

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