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  • Income Tax Slabs and Rates for Assessment Year 2016-17

    Given below are the rates at which income is taxed in India for income earned in different slabs, and through various heads of income.

    The tax rates and tax slabs have been arranged depending on the profile and category of the taxpayer / tax paying entity.

    1. For Individual TaxPayers (Resident Indian or NRI):

    2. Level of IncomeRate of Tax
      Up to Rs.2,50,000No tax
      Rs.2,50,000 to Rs.5,00,00010%
      Rs.5,00,000 to Rs.10,00,00020%
      Over Rs.10,00,00030%
      Income Tax Slabs and Rates

      Plus:

      • Surcharge: If income is greater than Rs.1,00,00,000 – 12% of income tax amount. Subject to marginal relief.
      • Education Cess: 2% extra – charged on the amount of income tax + surcharge being paid.
      • Secondary and Higher Education Cess: 1% extra – charged on the amount of income tax + surcharge being paid.

      Less:

      • Rebate under Section 87A: For individuals with total income less than Rs.5,00,000 – a total rebate amount of Rs.2,000 or 100% of the income tax (whichever is lesser).
    3. For Hindu Undivided Families (HUF):

    4. Level of IncomeRate of Tax
      Up to Rs.2,50,000No tax
      Rs.2,50,000 to Rs.5,00,00010%
      Rs.5,00,000 to Rs.10,00,00020%
      Over Rs.10,00,00030%

      Plus:

      • Surcharge: If income is greater than Rs.1,00,00,000 – 12% of income tax amount. Subject to marginal relief.
      • Education Cess: 2% extra – charged on the amount of income tax + surcharge being paid.
      • Secondary and Higher Education Cess: 1% extra – charged on the amount of income tax + surcharge being paid.

      Less:

      • Rebate under Section 87A: For HUFs with total income less than Rs.5,00,000 – a total rebate amount of Rs.2,000 or 100% of the income tax (whichever is lesser).
    5. For legal Entities Registered as Associations of Persons:

    6. Level of IncomeRate of Tax
      Up to Rs.2,50,000No tax
      Rs.2,50,000 to Rs.5,00,00010%
      Rs.5,00,000 to Rs.10,00,00020%
      Over Rs.10,00,00030%

      Plus:

      • Surcharge: If income is greater than Rs.1,00,00,000 – 12% of income tax amount. Subject to marginal relief.
      • Education Cess: 2% extra – charged on the amount of income tax + surcharge being paid.
      • Secondary and Higher Education Cess: 1% extra – charged on the amount of income tax + surcharge being paid.

      Less:

      • Rebate under Section 87A: For Associations of Persons with total income less than Rs.5,00,000 – a total rebate amount of Rs.2,000 or 100% of the income tax (whichever is lesser).
    7. For Legal Entities Registered as Bodies of Individuals:

    8. Level of IncomeRate of Tax
      Up to Rs.2,50,000No tax
      Rs.2,50,000 to Rs.5,00,00010%
      Rs.5,00,000 to Rs.10,00,00020%
      Over Rs.10,00,00030%

      Plus:

      • Surcharge: If income is greater than Rs.1,00,00,000 – 12% of income tax amount. Subject to marginal relief.
      • Education Cess: 2% extra – charged on the amount of income tax + surcharge being paid.
      • Secondary and Higher Education Cess: 1% extra – charged on the amount of income tax + surcharge being paid.

      Less:

      • Rebate under Section 87A: For Bodies of Individuals with total income less than Rs.5,00,000 – a total rebate amount of Rs.2,000 or 100% of the income tax (whichever is lesser).
    9. For Other Artificial Judicial Persons:
    10. Level of IncomeRate of Tax
      Up to Rs.2,50,000No tax
      Rs.2,50,000 to Rs.5,00,00010%
      Rs.5,00,000 to Rs.10,00,00020%
      Over Rs.10,00,00030%

      Plus:

      • Surcharge: If income is greater than Rs.1,00,00,000 – 12% of income tax amount. Subject to marginal relief.
      • Education Cess: 2% extra – charged on the amount of income tax + surcharge being paid.
      • Secondary and Higher Education Cess: 1% extra – charged on the amount of income tax + surcharge being paid.

      Less:

      • Rebate under Section 87A: For Judicial entities with total income less than Rs.5,00,000 – a total rebate amount of Rs.2,000 or 100% of the income tax (whichever is lesser).
    11. For Resident Senior Citizens (Over the Age of 60, and Under the Age of 80 on the last day of the Previous Year):

    12. Level of IncomeRate of Tax
      Up to Rs.3,00,000No tax
      Rs.3,00,000 to Rs.5,00,00010%
      Rs.5,00,000 to Rs.10,00,00020%
      Over Rs.10,00,00030%

      Plus:

      • Surcharge: If income is greater than Rs.1,00,00,000 – 12% of income tax amount. Subject to marginal relief.
      • Education Cess: 2% extra – charged on the amount of income tax + surcharge being paid.
      • Secondary and Higher Education Cess: 1% extra – charged on the amount of income tax + surcharge being paid.

      Less:

      • Rebate under Section 87A: For Resident Indian Senior Citizen taxpayers with total income less than Rs.5,00,000 – a total rebate amount of Rs.2,000 or 100% of the income tax (whichever is lesser).
    13. For Resident Super Senior Citizens (who are over the age of 80 as on the last day of the Previous Year):

    14. Level of IncomeRate of Tax
      Up to Rs.5,00,000No tax
      Rs.5,00,000 to Rs.10,00,00020%
      Over Rs.10,00,00030%

      Plus:

      • Surcharge: If income is greater than Rs.1,00,00,000 – 12% of income tax amount. Subject to marginal relief.
      • Education Cess: 2% extra – charged on the amount of income tax + surcharge being paid.
      • Secondary and Higher Education Cess: 1% extra – charged on the amount of income tax + surcharge being paid.
    15. For Partnership Firms:

    16. Partnership Firms and LLPs (Limited Liability Partnerships) are to be taxed at the rate of 30%.

      Plus:

      • Surcharge: If income is greater than Rs.1,00,00,000 – 12% of income tax amount. Subject to marginal relief.
      • Education Cess: 2% extra – charged on the amount of income tax + surcharge being paid.
      • Secondary and Higher Education Cess: 1% extra – charged on the amount of income tax + surcharge being paid.
    17. For Local Authorities:

    18. Local Authorities are to be taxed at the rate of 30%.

      Plus:

      • Surcharge: If income is greater than Rs.1,00,00,000 – 12% of income tax amount. Subject to marginal relief.
      • Education Cess: 2% extra – charged on the amount of income tax + surcharge being paid.
      • Secondary and Higher Education Cess: 1% extra – charged on the amount of income tax + surcharge being paid.
    19. For Domestic Companies:

    20. Domestic Companies are to be taxed at the rate of 30%.

      Plus:

      • Surcharge: If income is greater than Rs.1,00,00,000 – 7% of the income tax amount. If income is greater than Rs.10,00,00,000 – 12% of the income tax amount. Subject to marginal relief.
      • Education Cess: 2% extra – charged on the amount of income tax + surcharge being paid.
      • Secondary and Higher Education Cess: 1% extra – charged on the amount of income tax + surcharge being paid.
    21. For Foreign Companies:

    22. Nature of IncomeRate of Tax
      If the income received by the Foreign Company is in the form of royalties paid by the Indian Government in relation to agreements made with an Indian concern (after March 31st, 1961, and before April 1st, 1976)50%
      If the income received is 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 income40%

      Plus:

      • Surcharge: If income is greater than Rs.1,00,00,000 – 2% of the income tax amount. If income is greater than Rs.10,00,00,000 – 5% of the income tax amount. Subject to marginal relief.
      • Education Cess: 2% extra – charged on the amount of income tax + surcharge being paid.
      • Secondary and Higher Education Cess: 1% extra – charged on the amount of income tax + surcharge being paid.
    23. For Co-operative Societies:

    24. Level of IncomeRate of Tax
      Up to Rs.10,00010%
      Rs.10,000 to Rs.20,00020%
      Over Rs.20,00030%

      Plus:

      • Surcharge: If income is greater than Rs.1,00,00,000 – 12% of income tax amount. Subject to marginal relief.
      • Education Cess: 2% extra – charged on the amount of income tax + surcharge being paid.
      • Secondary and Higher Education Cess: 1% extra – charged on the amount of income tax + surcharge being paid.

    News About Income Tax Slabs and Rates

    • New Income Tax Disclosure Norms may be difficult for HNIs and the Ultra-Rich

      Individuals earning more than 50 lakh rupees per annum are required now to declare ‘the acquisition costs of high-value assets like jewelry, flats, land, apparel and other precious metals owned by them. The main motto of the Income Tax Department behind such a rule is to nab tax evaders from the ultra rich category of taxpayers. Mostly, HNIs do not disclose details of all the assets owned by them in order to save on tax payment.

      Critics however, are of the view that it is not necessary for individuals to remember or keep track of all valuables or assets owned by them and in such cases it might become a little too difficult to abide by this new rule of the IT department.

      24th May 2016

    • IT Department introduces New Tax Disclosure Norms for the Ultra-Rich and HNIs

      The Income Tax Department has introduced new income tax disclosure norms under which individuals with a yearly income of more than Rs 50 Lakhs are required to disclose the cost of acquisition of any assets such as property, jewellery, precious metals, apparels etc in their tax return forms for the assessment year 2016-17. However, tax experts are of the opinion that this might make life difficult for the ultra-rich as well as high networth individuals since they might find it hard to keep a track of all the items mentioned by the Income Tax Department. CEO and founder of BigDecisions.com, Manish Shah, stated that many of the individuals in question have assets spread all over India as well as abroad, making it hard for them to keep a record of such items. He also stated that the new norms were introduced to counter tax evasion on the part of those individuals with a high networth who do not declare assets in order to avoid paying tax.

      12th May 2016

    • Revenue Secretary says that raising tax slabs could have resulted in huge loss

      Changing the Income Tax slab would have resulted in huge losses of around Rs.20000 crore. The same has been revealed by the Revenue Secretary Hasmukh Adhia. The secretary revealed that the government had planned to benefit only the small taxpayers as part of the recent budget. There also was the issue of fiscal deficit to be addressed and as such taxpayers in the higher bracket of 20-30 per cent will have to wait.

      Another reason for not changing the slabs is that the effective rate of tax paid by most taxpayers is less because of various tax exemptions that people take advantage of. He said one of the most positive decisions taken by the government was to hold the fiscal deficit at 3.5 per cent of the GDP and not letting it exceed that figure.

      6th April 2016

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