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Should I pay income tax?

The one normal question that arises among the new money makers is “Should I pay any tax for my income?” . Well, here is the answer that explains how the Government of India has classified age and income slabs for levying income tax.

Tax is calculated based on the income tax slabs announced in the national budget every year. To know the other important announcements in the budget, Click here

Proposed income tax slabs for FY 2017-2018 (assessment year 2018-2019) announced in Budget 2017,

RESIDENT INDIVIDUAL BELOW THE AGE OF 60 YEARS
Net Income Range (per annum) Income Tax Rates Education Cess Secondary and Higher Education Cess
Up to Rs. 2.5 Lakhs Nil Nil Nil
Rs. 2,50,001 to Rs. 5 Lakhs 5% of (Total income – Rs. 2.5 Lakhs) 2% of income tax 1% of income tax
Rs. 5,00,001 to Rs. 10 Lakhs Rs. 12,500 + 20% of (Total income – Rs. 5 Lakhs) 2% of income tax 1% of income tax
Above Rs. 10 Lakhs Rs. 1,10,000 + 30% of (Total income – Rs. 10 Lakhs) 2% of income tax 1% of income tax
Surcharge at 10% for taxable income between Rs. 50 Lakhs to Rs. 1 Crore
Surcharge at 15% for taxable income more than Rs. 1 Crore

 

RESIDENT INDIVIDUAL OF AGE 60 YEARS TO BELOW 80 YEARS
Net Income Range (per annum) Income Tax Rates Education Cess Secondary and Higher Education Cess
Up to Rs. 3 Lakhs Nil Nil Nil
Rs. 3,00,001 to Rs. 5 Lakhs 5% of (Total income – Rs. 3 Lakhs) 2% of income tax 1% of income tax
Rs. 5,00,001 to Rs. 10 Lakhs Rs. 10,000 + 20% of (Total income – Rs. 5 Lakhs) 2% of income tax 1% of income tax
Above Rs. 10 Lakhs Rs. 1,10,000 + 30% of (Total income – Rs. 10 Lakhs) 2% of income tax 1% of income tax
Surcharge at 10% for taxable income between Rs. 50 Lakhs to Rs. 1 Crore
Surcharge at 15% for taxable income more than Rs. 1 Crore

 

RESIDENT INDIVIDUAL OF AGE ABOVE 80 YEARS
Net Income Range (per annum) Income Tax Rates Education Cess Secondary and Higher Education Cess
Up to Rs. 5 Lakhs Nil Nil Nil
Rs. 5,00,001 to Rs. 10 Lakhs 20% of (Total income – Rs. 5 Lakhs) 2% of income tax 1% of income tax
Above Rs. 10 Lakhs Rs. 1,00,000 + 30% of (Total income – Rs. 10 Lakhs) 2% of income tax 1% of income tax
Surcharge at 10% for taxable income between Rs. 50 Lakhs to Rs. 1 Crore
Surcharge at 15% for taxable income more than Rs. 1 Crore

Usually Surcharge is levied on the income tax payable amount. To know more about Surcharge, Click here

Education Cess (2%) and Secondary and Higher Education Cess (1%) are levied on the tax payable amount. Both the cess will be added to the income tax payable to derive the total tax payable amount.

In case, if you fall under the category where surcharge is levied, cess will be levied on tax payable + surcharge amount.

To know what is Education Cess and Secondary and Higher Education Cess, Click here

Rebate of Income Tax

Rebate of income tax is available to a resident individual if his/her total income per annum does not exceed Rs. 5 Lakhs. To know about the rebate of income tax and its procedures, Click here

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