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Income Tax Rates for Finance Year 2017-2018

Income Tax is a type of tax that is levied by the Government. The income tax is imposed on the individuals or the entities (taxpayers) that varies with their respective income or profits. The tax money is collected by the Government is used to improve the economy and the infrastructure of the country. The income tax s counted as the stable source of income for the Government to facilitate a wide range of services for the people of the nation. The income tax is used for paying the Government employees their salary.

How is the Income Tax Calculated

The Income tax is calculated on the basis of the income or the salary earned by every individual. It is also calculated on the basis of the age factor. To calculate the income tax from the salary, the individual has to declare the total amount of earning and the total amount of the deductions. The Government allows the individual to draw exemption on particular types of the investment. The following income tax slabs will help you to get an idea in calculating your taxable income for all types of income slabs.

Budget 2017 Highlights for the Common Man

  • 5% of Tax is applicable for the income between Rs 2.5 Lakhs and 5 lakhs.
  • No tax is applicable for the income up to 3 lakhs due to Rs 2500 rebate.
  • Tax benefits of Rs 12,500 are applicable for the income over Rs 5 Lakhs.
  • No cash transactions are applicable above Rs 3 Lakhs.
  • No scrutiny for the first time taxpayers, unless special circumstances are involved.

Income Tax Slabs

  • Tax Applicable to the Individuals Below 60 years: (for both Men and Women)

 

Annual Income

 

Tax Rates

 

Education Cess

Secondary and Higher Education Cess
Up to Rs 2, 50, 000 Nil Nil Nil
Rs 2, 50, 001- Rs 5, 00,000  

5%

 

2% of the income tax

 

1% income tax

Rs 5, 00, 001- Rs 10,00, 000  

Rs 12, 500 + 20%

 

2% of the income tax

 

1% of the income tax

Above Rs 10,00, 000 Rs 1, 12, 500 + 30% 2% of the income tax 1% of the income tax
  • Tax Applicable to the Individuals Over 60 years and under 80 years: (for both men and women)

 

Annual Income

 

Tax Rates

 

Education Cess

Secondary and Higher Education Cess
Up to Rs 3, 00, 000 Nil Nil Nil
Rs 3,00, 001 –Rs 5, 00, 000  

5%

 

2% of the income tax

 

1% of the income tax

Rs 5, 00, 001- Rs 10, 00, 000  

Rs 10, 000 +20%

 

2% of the income tax

 

1% of the income tax

Above Rs 10, 00, 000 Rs 1, 10, 000 + 30% 2% of the income tax 1% of the income tax
  • Tax Applicable to the Individuals Over 80 years and above: (for both men and women)

Annual Income Tax Rates Education Cess Secondary and Higher Education Cess
Up to Rs 5, 00, 000 Nil Nil Nil
Rs 5, 00, 001- Rs 10, 00, 000  

20%

 

2% of the income tax

 

1% of the income tax

Above Rs 10, 00, 000 Rs 1, 00, 000+ 30% 2% of the income tax 1% of the income tax

 The TDS is deducted at applicable rates along with the surcharge and the Education Cess.

Income Tax Slabs for Domestic Companies

For the domestic companies, whose total turnover does not exceed Rs 5 Crores their income tax rate has been reduced to 29% (plus applicable surcharge and educational Cess).

  1. In case you have a manufacturing company, then the income tax rate of 25% for the domestic companies is applied. If the company has been set up and registered after 1st March 2016, it does not claim any tax incentives.
  2. In other cases, the tax rates remain unchanged at 30% (plus applicable surcharge and education Cess)

Different Tax Rates under the Domestic Companies

 

 

Particulars

 

Turnover/Gross receipts less than Rs 5 crores Turnover/Gross receipts more than Rs 5 crore
Taxable income less than Rs 1 crore Taxable income more than Rs 1 crore Taxable income less than Rs 1 crore Taxable income more than Rs 1 crore but less than Rs 10 crores Taxable income more than Rs 10 crores
Corporate tax 29% 29% 30% 30% 30%
Surcharge 0 7% 0 7% 12%
Corporate tax + surcharge 29% 31% 30% 32.10% 33.60%
Education cess 3% 3% 3% 3% 3%
Effective tax rate 29.87% 31.96% 30.90% 33.06% 34.61%

Special Rates Taxation on some Income

Though the total income is taxable at income tax slab rates, there are some incomes that are taxed at special rates:

Nature Tax Rate
Short-term capital gains from assets (Other than shares & mutual funds)  

The Income Tax Slab rates mentioned above

Long-term capital gains from assets (Other than shares & mutual funds)  

20%

Short-term capital gains on shares and equity mutual funds  

15%

Long-term capital gains on shares and equity mutual funds  

NIL

Short-term capital gains on debt mutual funds Income Slab Rates mentioned above
Long-term capital gains on debt mutual funds 20%

The Income Tax Slabs are proposed in the Union Budget this year. Upon the implementation, a taxpayer is expected to file their income and deductions. The taxpayer also files their Income Tax Return in order to receive the refund for the excess tax paid to the Government. Recently, the Income Tax Department has observed an increment in the number of people filling their taxes on time.

Income Tax Calculator

The Income Tax Calculator is an online tool which enables the individuals to have a quick and easy access to the basic tax calculation. The benefits of the Income Tax Calculator is that it gives you the accurate calculation of tax that should be calculated for a particular Financial Year. This tool is available on the Official website of the Income Tax Department.

How to use the Income Tax Calculator

The Step by Step procedure to calculate the Income Tax Calculator is as follows:

  • Visit the official page of the Income Tax Department.
  • Click on the following link provided here- https://www.incometaxindia.gov.in/Pages/tools/tax-calculator.aspx
  • Now enter the assessment year for which you want to calculate.
  • Mention the category of the Taxpayer.
  • Select the Gender option, Residential Status.
  • Then enter the net taxable income
  • Enter the Income Tax after relief u/s 87A
  • Enter the Surcharge and Education Cess and Secondary and Higher Education Cess
  • Then at the end enter the total tax liability.
  • After entering all the details now click on submit to get the output.

The Tax calculator gives the information within minutes. Thus, paying Income Tax is mandatory. It is a responsibility that every citizen should do.


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