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

Income Tax by Raj Kumar on February 5, 2017 314 views add comment income tax rates Tax slabs

Each year Finance minister present Budget in Indian Parliament. The First Schedule of Finance Act has 4 parts.

Part I – It specifies rates applicable for current Assessment Year.

Part II – It specifies the rates for Tax Deductible at Source (TDS) for current Financial Year.

Part III – It specifies rates for calculating income tax for deducting tax from income chargeable under the head of “Salaries” and computation of advance tax.

Part IV – It provides for rules of computing net agricultural income.

Tax rates are different for different individuals. Below are tax rates applicable for FY 2016-17 for different individuals.

For Individual / Hindu Undivided Family (HUF) / Association of Persons (AOP) / Body of Individuals (BOI) / Artificial Judicial Person
Where income is below ₹ 2,50,000/-	Nil
2. Where income is between ₹ 2,50,000 – 5,00,000/-	10% of income that exceeds ₹ 2,50,000/-
3. Where total income is between ₹ 5,00,000 and ₹ 10,00,000/-	₹ 25,000 + 20% of income between ₹ 5,00,000 – 10,00,000/-
4. Where income exceeds ₹ 10,00,000/-	₹ 1,25,000 + 30% of income that exceeds ₹ 10,00,000
For Individuals who are residents and of 60 years or above, but less than 80 years
Where income is below ₹ 3,00,000/-	Nil
2. Where income is between ₹ 3,00,000 – 5,00,000/-	10% of income that exceeds ₹ 3,00,000/-
3. Where total income is between ₹ 5,00,000 and ₹ 10,00,000/-	₹ 20,000 + 20% of income between ₹ 5,00,000 – 10,00,000/-
4. Where income exceeds ₹ 10,00,000/-	₹ 1,20,000 + 30% of income that exceeds ₹ 10,00,000
For Individuals who are residents and of 80 years or more
Where income is below ₹ 5,00,000/-	Nil
2. Where total income is between ₹ 5,00,000 and ₹ 10,00,000/-	20% of income between ₹ 5,00,000 – 10,00,000/-
3. Where income exceeds ₹ 10,00,000/-	₹ 1,00,000 + 30% of income that exceeds ₹ 10,00,000
For Firms / LLP
On whole of Income	30%
Local Authority
On Whole of Income	30%
Co – operative Society
Where income doesn’t exceed ₹ 10,000/-	10% of total income
2. Where income exceeds ₹ 10,000 but not ₹ 20,000	₹ 1,000 + 20% of income above ₹ 10,000/-
3. Where income exceeds ₹ 20,000	₹ 3,000 + 30% of income above ₹ 30,000/-
For Companies
For Domestic Companies	30% of total income
2. For Foreign Companies	40% of total income

These are tax rates only. Final Tax is subject to other conditions. Some other special Tax rates are –

Long Term Capital Gain Tax, in general, is @ 20%. Under Section 115BB, tax rate of 30% is applicable for income from winnings-
1. Any lottery;
2. Crossword puzzle;
3. Race including Horse race;
4. Card Game and any sort of other game;
5. Gambling or betting of any form

There is also surcharge on high income. The rates of Surcharge for AY 2017-18 are-

For Individual / HUF / AOP / BOI / Artificial Judicial Person / Co – Operative Societies / Local Authorities / Firms / LLPs
Where income exceeds ₹ 1 Crore	12% of income tax computed by applying above rates
Marginal Relief is available where income exceeds ₹ 1 Crore and Surcharge is Applicable. The amount of Surcharge should not be more than income that exceeds ₹ 1 Crore.
Domestic Companies
Where income exceeds ₹ 1 Crore but not ₹ 10 Crores	7% of income tax computed by applying above rates.
2. Where income exceeds ₹ 10 Crores	12% of income tax computed by applying above rates.
Marginal Relief is available. Surcharge at 7% cannot exceed the income above ₹ 1 Crore. Similarly, Surcharge at 12% cannot exceed the income above ₹ 10 Crores.
Foreign Companies
Where income exceeds ₹ 1 Crore but not ₹ 10 Crores	2% of income tax computed by applying above rates
2. Where income exceeds ₹ 10 Crores	5% of income tax computed by applying above rates
Marginal Relief is available. Surcharge at 2% cannot exceed the income above ₹ 1 Crore. Similarly, Surcharge at 5% cannot exceed the income above ₹ 10 Crores.

To reduce the burden on small taxpayers, there is rebate under section 87A. Rebate of ₹ 5,000/- is allowed for small taxpayers whose income doesn’t exceed ₹ 5,00,000/-.

“Education Cess” @ 2% and “Secondary and Higher Education Cess” @ 1% is applicable on Taxes calculated by applying at above rates. This Cess are collected by the government to meet its commitment of providing finance to education.

An Example for calculating tax-

Illustration 1 – Mr. A who is resident in India has income of ₹ 4,50,000/- in FY 2016-17 i.e. AY 2017-18. His age is below 60 years. His Tax will be calculated as-

His Income = ₹ 4,50,000/-

Tax Slab of ₹ 2,50,000 – 5,00,000 is applicable @ 10%. Therefore, his basic tax = 10% of (4,50,000 – 2,50,000)

i.e., 20,000

Since, his income is below ₹ 5,00,000, he will get rebate of ₹ 5,000.

Therefore, his tax liability is of ₹ 20,000 – ₹ 5,000 = ₹ 15,000/-

Illustration 2 – Mr. A who is resident in India has income of ₹ 6,50,000/- in FY 2016-17 i.e. AY 2017-18. His age is below 60 years. His Tax will be calculated as-

His Income = ₹ 6,50,000/-

Tax Slab of ₹ 5,00,000 – 10,00,000 is applicable @ 25,000 + 20% for income above ₹ 5,00,000. Therefore, his basic tax = 25,000 + 20% of (6,50,000 – 5,00,000)

i.e., ₹ 55,000/-

Since, his income is above ₹ 5,00,000, he will not get rebate of ₹ 5,000. Therefore, his tax liability is of ₹ 55,000/-

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Tags : income tax rates Tax slabs

The author Raj Kumar

I love blogging and studying taxation. I write articles related to Tax laws and common issues in handling taxation in India. Often, common but small mistakes make things complicated. I write and share them to save precious time of others.