Income Tax Slab Structure [Male,Female, HUF, Senior Citizen, Super Senior Citizen] FY 2017-18 AY 2018-19
The seemingly unending speculations and debates finally came to an end when the Finance Minister of India, Arun Jaitley announced the budget. Commoners had high expectations with the budget as it was supposed to bring some relief to the Indians after the massive cash crunch.
The amount of money that the common people will be able to save will depend on the decisions taken in the budget. Though the expectations of all quarters have not been adequately met, the budget seems to be useful on preliminary levels. It is all a matter of time that we find out whether the average Indians give the decisions a thumbs up or down!
An update on the Financial Budget of 2017: The prominent change, in the Income Tax Slab, will prove to be advantageous for individuals who fall in the annual income brackets of 2.5 to 5 Lakhs as the tax rate has been slashed from 10% to 5%.
For those falling in the annual earnings brackets of 5 to 10 Lakhs and more than 10 Lakhs, there is no good news on the income tax front. The rate of tax has been unchanged, and the individuals have to pay 20% and 30% tax respectively. Some changes have been made in the case of surcharges, and the way in which they will be applied will be changed from the financial year of 2017 – 2018.
2016 – 17 and 2017 – 18 Income Tax Structures
There are millions of people in the country, and not all of them can fall in the same tax structure. To ease the process of tax calculation, there are many slabs for the taxpayers. The different slabs of the income tax structure can be explained as under:
- Individuals and HUF
- For individual of both female and male sexes who belong age group of 60 years and HUF
- For all elderly citizens of the country who fall in the age bracket of above 60 years
- For every citizen who will fall in the category of Superior Senior individuals, i.e. who fall in the age bracket of above 80 years
- The information about the ways in which the surcharge can be applied according to the various circumstances
- Co-operative associations and organizations
- Business firms, local establishments, and domestic corporations
- Cess on Education and SHEC
Explaining the rates of Income Tax Categories
- Individuals and HUF
The following are data will give you a detailed look at the tax rate slab that will be operational for the financial year of 2017 to 2018. While a person is filling the Return forms of Income tax, a 1% of the taxable income will be charged as the SHEC, and an Educational Cess of 2% will also be charged.
The government has also thought about the individuals with less income and so, they will be offering a reimbursement under the Section 87A. Earlier, the total amount of this rebate was Rs. 5000 p.a but in the budget for 2017 – 2018 economic assessment year, the amount of rebate has been reduced and now it amount of Rs, 2500 p.a. This discount amount will only be available to the residents of the particular area, provided their annual income is less than Rs. 3, 50,000.
Articles, associated with the topic of rebate reduction will assist you in understanding the new amendment better. The rebate rate has been reduced from Rs. 5000 per year to Rs. 2500 per annum. This has been done under Section 87A.
- Male or female candidates, not more than 60 years and HUF
Rate of calculating the income tax is then same for both men and women professionals. But there are certain differences, which can be highlighted in this respect. The following table will give you a look at the rate, according to which the income tax for the financial term of 2016 – 2017 will be calculated:
- In case the total earnings of the individual, for the financial term, does not exceed Rs. 2,50,000 mark, they will not be placed under the slab of income tax.
- When the total amount of the earnings of any person, on an annual basis, will be on the plus side of Rs. 2,50,000 but on the lesser side of Rs. 5,00,000, the amount of tax will be 10% of the total amount that is more than Rs. 2,50,000
- When the total income of the candidate, on per annum basis, is more than 5,00,000 but will not be more than 10 Lakhs, then the tax will be calculated at 20% of the amount above 5 Lakhs
- When the annual income of the individual is on the plus side of 10,00,000, the tax will be calculated at 20% on the amount that will be more than 10 Lakhs
The following points will provide you the data about the income tax calculations, which will be put to motion in the financial year of 2017 – 18:
- When the total revenue of an individual is not more than Rs.2,50,000, then no tax will be charged from them.
- When the annual salary of the individual is on the upper side of Rs.2,50,000 but does not exceed 5 Lakhs, they will have to pay an income tax of 10% on the amount that will be excess of 2,50,000
- When the total revenue collected by an individual, on a per annum basis is more than 5 Lakhs but will not go over 10 Lakhs, then their tax will be calculated at 20% on the amount that will exceed 5 Lakhs
- In case the annual income of a person is more than 10 Lakhs, then the income tax will be calculated at 30% on the amount that will exceed 10Lakhs
- Categories of tax payments for senior citizens who fall in the age bracket of more than 60 years
The following points will give you detailed info on the various rates, which will be put on the annual income of the senior citizens, for the financial assessment term of 2016 – 17:
- When the annual revenue gained by the individual will not be more than 3 Lakhs, then they will not fall under the obligation of paying any income taxes
- When the income of the senior citizen will be more than 3 Lakhs but will be less than 5 Lakhs, then they will have to pay an income tax of 10% of the amount that will exceed the 3 Lakh mark
- When the total income of the person will be more than 5 Lakhs but will be on the lesser side of 10 Lakh mark, then their income tax will be calculated at 205 of the amount that will exceed the 10 Lakh mark
- In case the total income, on an annual basis, their tax will be calculated on 30% on the total sum that will exceed the 10 Lakhs mark
The following table will give you a close look at the data, associated with the income tax calculation for the senior citizens, for the financial term of 2017 – 2018:
- When the revenue of the person, on an annual basis, will not be more than 3 Lakhs, then they will not be brought under the obligation of paying income tax
- When the income of the senior citizen, on an annual basis will be more than 3 Lakhs but under the 5 Lakhs mark, then their income tax will be calculated at 5% on the amount that will exceed 3 Lakhs mark
- When the income of a person is more than 5 Lakh but not on the plus side of 10 Lakhs, then they will have to pay a tax of 20% on the amount that is above 5 Lakh mark
- In case, the income of the senior citizen exceeds the 10 Lakh mark; then their tax will be calculated by 30% on the amount that is above the 10 Lakhs mark
- Categories of tax calculation slab for individuals falling in the group of Super Senior Citizens
The table below will give you a clear idea about the new tax calculation structure for all the individuals, who fall into the category of Super Senior Citizens. These individuals are above the age of 80 years.
- When the annual income of the person is within and less than 5 Lakhs, no tax will be levied on them
- When the individual has an annual income of more than 5 Lakhs but does not earn more than 10 Lakhs, they will be charged at 20% on the amount that will exceed the 5 Lakhs
- In case the annual income of the individual is more than 10 Lakhs, their income tax will be calculated at 30% on the amount that exceeds the 10 Lakhs mark
Determining the age of the Senior and Super Senior Citizens
If the individual is opting to avail the advantages of the tax schemes for the Senior and the Super Senior, then they will have to identify their actual age first. The age (60 or 80), which they attain, when the financial term commences, will be regarded as the official age for the entire term.
To understand the concepts better, reading some of the articles, based on the Tax Schemes of Super Senior Citizens will be helpful.
Calculating the amount of surcharge
One must remember that surcharge will be charged on the people who have an annual income of more than 50 Lakhs. The following table will give you detailed info about the rate of surcharge that will be charged:
- In case the person has an annual income of less than 50 Lakhs, then they will not have to pay any surcharge
- In case the person has an annual income of more than 50 Lakhs but does not cross the 1 Crores mark, then the surcharge will be calculated at a rate of 10%
- When the annual income of the individual is more than 1 Crores, then the surcharge will be charged at 15%
Before going further on the topic, you need to understand that the Surcharge is not calculated on the actual amount that the person makes. It is charged on the income tax of the person. If you take a look at the article titled “Surcharge on Income Tax” then you will get the details on how to calculate the surcharge amount.
First of all the total amount of Tax Payable is calculated, keeping true to the slabs outlined in the income tax rate structure. The necessary deductions are made on the amount as per the TDS forms. These are laid out in Form 16 and Form 16A and duly highlighted Form 26AS will provide you info about the calculation of Balance Tax as well.
- Tax Slabs for Trade and Commerce sector
The following data table will give you a look at the rates of calculating tax on the various kinds of trade and commerce organizations for the financial year of 2017 – 18:
- Tax structure for any Co-operative Society
- If the total annual income of the co-operative is less than Rs. 10,000, they will be charged 10% of their total income as tax.
- When the annual revenue of the co-operative is on the plus side of Rs. 10,000 but does not exceed the Rs. 20, 000 marks, then their tax will be calculated at 20% on the amount that will exceed Rs. 10,000
- When the income of a co-operative, on an annual basis is more than Rs. 20,000, then their tax will be calculated at 30% on the amount that will exceed the 20,000 mark.
- Tax calculation for the organizations and locale companies
There are no separate slabs for calculating the tax of organizations, which fall in this category. The amount of tax is calculated at 30% on the total earnings of the organization, in the financial term.
These organizations will be brought directly under the surcharge act from the financial term of 2017 – 18:
- When the income of the firm, on an annual basis is less than 1 Crore, they are not brought under the scheme of surcharge
- When the income of the firm, on an annual basis is above the 1 Crore mark, then the surcharge will be charged at 12%
If at any point in time, in the financial year, the total income of the firm happens to go above the 1 Crore mark, they will be charged the surcharge on tax as well. However, they will be barred from the burden of taxation if the income does not make the cut.
- Tax calculation structure for domestic organizations
According to the budget and the tax department, the income tax of the organizations used to be calculated at a rate of 30% on the total revenue generated by them. The Finance Minister announced in the Budget of 2017 that the rate would be slashed from 30% to 25%. This benefit will only be available for those companies, which will not have a turnover of more than 50 Crores.
The decision will be put in motion from the commencement of this financial term. In case the domestic firm acquires a turnover that exceeds the 50 Crore mark, the tax will be charged at the previous rate.
These companies also come under the scheme of Surcharge in the following circumstances:
- If the level of annual income of the domestic organization does not exceed the 1 Crore mark, then they will not be charged anything under the surcharge scheme
- In case the annual income of the firm is above 1 Crore but does not exceed the 10 Crore mark, they will be charged with the surcharge, calculated at 7%
- If the income of any domestic firm or company, for the entire financial term, exceeds the 10 Crore mark, then the surcharge will be calculated on the taxable income at 12%.
- Cess calculation on Education and SHEC
There are various rates of the cess in the educational sector. Usually, it is calculated at a rate of 2%. On the contrary, the education cess of 1% will be charged in case of both Higher Secondary and Secondary levels. It will be done on the Total Tax that will also include the surcharge. This scheme will be charged on all the categories of parties, falling under the tax structure.