Income tax slab rates for the financial year 2017-18, the assessment year 2018-19 for the individuals, companies, and firms, have been reduced to 5% on income between INR 2.5 Lakhs and INR 5 Lakhs, along with a rebate of INR 12,500 being offered to all. The tax-free limit for senior citizens now is INR 50,000 more than the previous one. Additionally, as of AY 2018-19, surcharge, Education CESS, Secondary and Higher Education CESS were added.
It is worth noting that a delay in filing your taxes will also cost you a fine. Anyone who fails to quote his PAN will have to pay double the rate mentioned in the income tax slab or rate of 5%, whichever is higher. Also, there will be a fine of INR 5000, if the tax return is filed after the due date, but before 31st December of the assessment year. The tax rebate under the segment of taxpayers has been reduced from INR 5,000 to INR 2,500, which is applicable to income up to INR 3.5 Lakhs, as per Section 87.
Income Tax Slab Rates for 2017-18 or AY 2018-19
|TAX||MEN and WOMEN ( below 60 years ) (INR)||Senior Citizen (between 60 years to 80 years) (INR)||For very Senior Citizen (Above 80 years) (INR)|
|Basic Exemption||2, 50, 000||3, 00,000||5,00,000|
|5% Tax||2,50,001 – 3,00,000||–||–|
|5% Tax||3,00,001 – 5,00,000||3,00,001 – 5,00,000||5,00,001 – 10,00,000|
|20% Tax||5,00,001 – 10,00,000||5,00,001 – 10,00,000||5,00,001 – 10,00,000|
|30% Tax||Above 10,00,000||Above 10,00,000||Above 10,00,000|
- 10% surcharge on income if the total income exceeds INR 50 Lakhs but below INR 1 Crore.
- 15% surcharge on income tax if total income exceeds INR 1 Crore.
- Education CESS: 2% cess on income exceeds INR 1 Crore.
- Secondary and Higher Education CESS: 1% cess on income tax including surcharge.
- Rebate under section 87A: INR 2500 or 100% of income tax for individuals with income below INR 3.5 Lakhs.
Additionally, salaried taxpayers, who receive house rent receipt, will now find it difficult to claim an exemption for housing rent allowance. Three years ago it was made mandatory for TDS to be deducted if the rent exceeds INR 50, 000 a month. It will also be very difficult to submit fake rent receipts to claim tax exemption.
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There has been no change in 80c limit, it is still INR 1.5 Lakhs. Investment in a national pension scheme will get you an extra tax deduction of up to INR 50, 000. Also, tax exception under Rajiv Gandhi Equity Scheme will not be available for FY 2017-18 onwards.
In terms of income from house property, interest deduction has been capped to INR 2 Lakhs. Tax break due to interest paid on rented home is likely to help investment in real estate. Salaried employees and businessmen paying more than 50,000 a month as rent will have to deduct tax at source at 5%, reduced tax rate of 25% on firms with turnovers up to INR 50 crore in FY 2015-16.
Note that being aware of any change in the income tax rates and its effect on your savings is essential. It helps you to take the necessary steps in planning your finances for a stable future.
Anamika Verma writes on various types tax, financial and investment related topics and has a vast experience as a financial advisor. Her expertise on financial issues is well sought after and she is known for her in-depth knowledge topics such as debt management, tax management, liquid assets, mutual funds etc. She has written more than 1000 blogs on topics related to Personal loan, travel loan, wedding loan, tax benefits. A post-graduate in finance management , Anamika loves to travel or cook in her free time.