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Faster, easier and secure gateway to e-file income tax return

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Income Tax Slabs: New and Old Tax Rates

In India, individuals are taxed according to the pre-set income tax slab rate which is made with earning levels per Financial Year. The slab rates are designed according to government rules and legislation and are subject to change according to finance amendments introduced. In India, individuals, HUFs, AOP, and BOIs are taxed according to the government scheduled tax rate as per the earning category. The businesses and companies are taxed at a fixed rate but exceptions are there for certain income level. This page will brief all related information that one must need to know about Indian income tax slab rate.

New Income Tax Slab Rate for FY 2017-18 (AY 2018-19)

In recent Union Budget, Finance Minister has announced new income tax slab for the Financial Year 2017-18. Changes in income tax slabs have been not only announced for the salaried individual but also for the business entities. A one-page IT Return Form will be introduced for the individual with income less than INR 5 Lakhs a year. The income group with earning under INR 3 lakhs per year will have zero tax liability due to the introduction of new section 87A. Also, income tax rate has been reduced to 25% from 30% for the businesses with yearly turnover under INR 50 Cr.

New income tax slab for salaried individuals & HUFs (under 60 years)

Income Tax Slab Tax Rate
Up to INR 2,50,000 No Tax
From INR 2,50,000 – INR 5,00,000 5%
From INR 5,00,000 – INR 10,00,000 20%
Above INR 10,00,000 30%

Surcharge:

  • 10% of income tax will be applicable on the taxpayers with income between INR 50 lakhs to 1 Cr.
  • 15% of income tax will be applicable on the taxpayers with income above INR 1 Cr.
A Cess of 3% on the total of income tax + surcharge will be also applicable to tax payment.

New income tax slab for salaried individuals & HUFs ( from 60 - 80 years old)

Income Tax Slab Tax Rate
Up to INR 3,00,000* No Tax
From INR 3,00,000 – INR 5,00,000 5%
From INR 5,00,000 – INR 10,00,000 20%
Above INR 10,00,000 30%

Surcharge:

  • 10% of income tax will be applicable on the taxpayers with income between INR 50 lakhs to 1 Cr.
  • 15% of income tax will be applicable on the taxpayers with income above INR 1 Cr.
A Cess of 3% on the total of income tax + surcharge will be also applicable to tax payment.
* In the case of individuals of the age group of 60-80 years, income up to INR 3,00,000 non-taxable.

New income tax slab for salaried individuals & HUFs (Above 80 years old)

Income Tax Slab Tax Rate
Up to INR 5,00,000* No Tax
From INR 5,00,000 – INR 10,00,000 20%
Above INR 10,00,000 30%

Surcharge:

  • 10% of income tax will be applicable on the taxpayers with income between INR 50 lakhs to 1 Cr.
  • 15% of income tax will be applicable on the taxpayers with income above INR 1 Cr.
A Cess of 3% on the total of income tax + surcharge will be also applicable to tax payment.
* In the case of individuals of the age group above 80 years, income up to INR 5,00,000 non-taxable.

Income Tax Slab Rates for FY 2016-17 (AY 2017-18)

The income tax slabs defined for FY 2016-17 are also applicable for the FY 2015-16 (AY 2016-17) and FY 2014-15 (AY 2015-16).

Income Tax Slab for Individual Tax Payers (Under Age 60)

Income Tax Slab Tax Rate
Up to INR 2,50,000 No Tax
From INR 2,50,000 to INR 5,00,000 10%
From INR 5,00,000 to INR 10,00,000 20%
Above INR 10,00,000 30%
A surcharge of 12% of income tax will be applicable on the taxpayers with income above INR 1 Cr. This is subjected to marginal relief.
An Education Cess of 2% and Secondary and Higher Education Cess of 1% on the total of income tax + surcharge will be also applicable to tax payment.

As per Section 87A, individuals with income less than INR 5,00,000 can get a rebate of INR 2,000 or 100% of the income tax (whichever is lesser).

For Resident Senior Citizens (from Age 60- 80 years as on the last day of the Previous Year)

Income Tax Slab Tax Rate
Up to INR 3,00,000 No Tax
From INR 3,00,000 to INR 5,00,000 10%
From INR 5,00,000 to INR 10,00,000 20%
Above INR 10,00,000 30%
A surcharge of 12% of income tax will be applicable on the taxpayers with income above INR 1 Cr. This is subjected to marginal relief.
An Education Cess of 2% and Secondary and Higher Education Cess of 1% on the total of income tax + surcharge will be also applicable to tax payment.

As per Section 87A, individuals with income less than INR 5,00,000 can get a rebate of INR 2,000 or 100% of the income tax (whichever is lesser).

For Resident Super Senior Citizens (Over the age of 80 as on the last day of the Previous Year)

Income Tax Slab Tax Rate
Up to INR 5,00,000 No Tax
From INR 5,00,000 – INR 10,00,000 20%
Above INR 10,00,000 30%
A surcharge of 12% of income tax will be applicable on the taxpayers with income above INR 1 Cr. This is subjected to marginal relief.
An Education Cess of 2% and Secondary and Higher Education Cess of 1% on the total of income tax + surcharge will be also applicable to tax payment.

As per Section 87A, individuals with income less than INR 5,00,000 can get a rebate of INR 2,000 or 100% of the income tax (whichever is lesser).

Income Tax Slab for Hindu Undivided Families (HUFs)

Income Tax Slab Tax Rate
Up to INR 2,50,000 No Tax
From INR 2,50,000 to INR 5,00,000 10%
From INR 5,00,000 to INR 10,00,000 20%
Above INR 10,00,000 30%
A surcharge of 12% of income tax will be applicable on the taxpayers with income above INR 1 Cr. This is subjected to marginal relief.
An Education Cess of 2% and Secondary and Higher Education Cess of 1% on the total of income tax + surcharge will be also applicable to tax payment.

As per Section 87A, individuals with income less than INR 5,00,000 can get a rebate of INR 2,000 or 100% of the income tax (whichever is lesser).

Income Tax Slab for legal Entities Registered as Associations of Persons

Income Tax Slab Tax Rate
Up to INR 2,50,000 No Tax
From INR 2,50,000 to INR 5,00,000 10%
From INR 5,00,000 to INR 10,00,000 20%
Above INR 10,00,000 30%
A surcharge of 12% of income tax will be applicable on the taxpayers with income above INR 1 Cr. This is subjected to marginal relief.
An Education Cess of 2% and Secondary and Higher Education Cess of 1% on the total of income tax + surcharge will be also applicable to tax payment.

As per Section 87A, individuals with income less than INR 5,00,000 can get a rebate of INR 2,000 or 100% of the income tax (whichever is lesser).

Income Tax Slab for Legal Entities Registered as Bodies of Individuals

Income Tax Slab Tax Rate
Up to INR 2,50,000 No Tax
From INR 2,50,000 to INR 5,00,000 10%
From INR 5,00,000 to INR 10,00,000 20%
Above INR 10,00,000 30%
A surcharge of 12% of income tax will be applicable on the taxpayers with income above INR 1 Cr. This is subjected to marginal relief.
An Education Cess of 2% and Secondary and Higher Education Cess of 1% on the total of income tax + surcharge will be also applicable to tax payment.

As per Section 87A, individuals with income less than INR 5,00,000 can get a rebate of INR 2,000 or 100% of the income tax (whichever is lesser).

Income Tax Slab for Other Artificial Judicial Persons

Income Tax Slab Tax Rate
Up to INR 2,50,000 No Tax
From INR 2,50,000 to INR 5,00,000 10%
From INR 5,00,000 to INR 10,00,000 20%
Above INR 10,00,000 30%
A surcharge of 12% of income tax will be applicable on the taxpayers with income above INR 1 Cr. This is subjected to marginal relief.
An Education Cess of 2% and Secondary and Higher Education Cess of 1% on the total of income tax + surcharge will be also applicable to tax payment.

As per Section 87A, individuals with income less than INR 5,00,000 can get a rebate of INR 2,000 or 100% of the income tax (whichever is lesser).

Income Tax Slab for Legal Entities Registered as Bodies of Individuals:
  • Partnership Firms and Limited Liability Partnerships (LLPs) are taxed at a flat rate of 30% over total income per Financial Year.
  • A surcharge of 12% of income tax will be applicable on the taxpayers with income above INR 1 Cr. This is subjected to marginal relief.
  • An Education Cess of 2% and Secondary and Higher Education Cess of 1% on the total of income tax + surcharge will be also applicable to tax payment.
Income Tax Slab for Local Authorities:
  • Local Authorities are taxed at a flat rate of 30% over total income per Financial Year.
  • A surcharge of 12% of income tax will be applicable on the taxpayers with income above INR 1 Cr. This is subjected to marginal relief.
  • An Education Cess of 2% and Secondary and Higher Education Cess of 1% on the total of income tax + surcharge will be also applicable to tax payment.
Income Tax Slab for Domestic Companies:
  • Domestic companies are taxed at a flat rate of 30% over total income per Financial Year.
  • A surcharge of 12% of income tax will be applicable on the taxpayers with income above INR 1 Cr. This is subjected to marginal relief.
  • An Education Cess of 2% and Secondary and Higher Education Cess of 1% on the total of income tax + surcharge will be also applicable to tax payment.

Income Tax Slab for Foreign Companies

Nature of income Tax Rate
If the Foreign company receive the income in form of royalty paid by the Indian Government in relation to agreements made with as Indian Concern (after March 31st, 1961, and before April 1st, 1976) 50%
If the Foreign company receive the income in the form of fees for technical services rendered for agreements made with Indian concerns (after February 29th, 1964, and before April 1st, 1976) 50%
Any other income 40%
Surcharge:
  • 2% of income tax will be applicable on the taxpayers with income less than INR 10 Cr. This is subjected to marginal relief.
  • 5% of income tax will be applicable on the taxpayers with income above INR 10 Cr. This is subjected to marginal relief.
An Education Cess of 2% and Secondary and Higher Education Cess of 1% on the total of income tax + surcharge will be also applicable to tax payment.

For Co-operative Societies

Income Tax Slab Tax Rate
Up to INR 10,000 10%
From INR 10,000 to INR 20,000 20%
Above INR 20,000 30%
A surcharge of 12% of income tax will be applicable on the taxpayers with income above INR 1 Cr. This is subjected to marginal relief.
An Education Cess of 2% and Secondary and Higher Education Cess of 1% on the total of income tax + surcharge will be also applicable to tax payment.

In the News

  • All India ITR launched Income tax e-filing app

    Vishwa Times: Simplifying tax compliance and avoiding expenses on your accountant is the aim of All India ITR’s new e-filing app. Designed to maximise portability and meet last minute rushes, this app is packed with security features and practical applications. It is also backed up by a team of financial experts for any assistance when required.

    13th June 2017

    Vishwa Times