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Income Tax Slabs and Rates for AY 2017-18

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This article tries to explain recent income tax slabs in a way that is easy to understand. You will find income tax slabs for the AY 2017-18 in the following article. Income tax is applicable on Individuals, Association of Persons (AOP), Hindu undivided family(HUF), Partnership firms, private limited companies and limited companies. Income tax of the assessment year 2016-17 will be collected in the financial year of 2017-18. This article will enable you to gain the knowledge about the average tax rates applicable to these different taxpayers.

Income tax rates applicable to an individual

The regular income tax rate which applies to a resident individual depends upon the age of the person. Whereas the tax rates will remain same irrespective of age for the non-resident individual.

Income tax slab for individual can be categorized as mentioned below

 Income Tax Slab for Resident individual below the age of 60 years.  i.e. born  on or after 01/04/1957

  1. A resident individual whose annual income does not exceed Rs. 2,50,000 is given tax relief. He is not liable to pay any taxes.
  2. A resident individual whose annual income exeedsRs.2,50,000 but less than Rs.5,00,000 is liable to pay 10% tax on the income  above Rs. 2,50,000.
  3. A resident individual whose annual income exceeds Rs.5,00,000 but less than Rs.10,00,000 is liable to pay Rs. 25000 + 20% tax on the income  above Rs. 5,00,000
  4. In the case where annual income of a resident individual exceeds Rs.10,00,000, the payable income tax will be Rs. 1,25,000 + 30% tax on the total income above Rs. 10,00,000.
  5. Educational Cess, as well as Secondary and Higher Educational Cell, is Nil up to the income of Rs.2,50,000. Education Cess is 2% of income tax whereas as Secondary and Higher Educational Cell is 1% of income tax is applicable in a case where income exceeds above Rs. 2,50,000.
  6. The surcharge is applicable @ 15% on the amount of income-tax where net income is above Rs. 1 crore. EC of 2%, as well as SHEC of 1%, will be levied on the amount of income-tax plus surcharge where a tax is levied.
  7. In the case, where the income of an individual is more than Rs. 1 crore, the amount payable as income-tax and surcharge cannot be more than the total amount paid as income tax on total revenues of Rs. 1 crore by more than the amount of revenue above Rs. 1 crore.
  8. For non-corporate taxpayer provisions of Alternate Minimum Tax (AMT) applies, the amount of tax payable could not be less than 18.5% (+SC+EC+SHEC) of adjusted total income computed as per section 115JC.
  9. In the case, where net income of a resident individual does not exceed Rs. 5,00,000, he is given rebate as per section 87A. It is deductible from tax before calculating education cess. The amount of rebate is calculated in context to 100 per cent of income-tax or Rs. 5,000, whichever is lesser.

Income Tax Slab for Resident individual of the age of 60 years or above but below the age of 80 years.  i.e. born  during  01/04/1957 to 31/03/1957 ( Senior Citizen)

  1. A resident individual whose annual income does not exceed Rs. 3,00,000 is given tax relief. He is not liable to pay any income tax.
  2. A resident individual whose annual income exeedsRs.3, 00,000 but less than Rs.5, 00,000 is liable to pay 10% tax on the income above Rs. 3,00,000.
  3. A resident individual whose annual income exeedsRs.5,00,000 but less than Rs.10,00,000 is liable to pay Rs 20000+20% tax on the income  above Rs. 5,00,000.
  4. In a case where annual income of a resident individual exceeds Rs.10,00,000, the payable income tax will be Rs. 1,20,000 + 30% tax on the total income above Rs. 10,00,000.
  5. Educational Cess as well as Secondary and higher Educational Cell is Nil up to the income of Rs.3,00,000. Education Cess is 2% of income tax whereas as Secondary and higher Educational Cell is 1% of income tax is applicable in a case where income exceeds above Rs. 3,00,000.
  6. The surcharge is applicable @ 15% on the amount of income-tax where net income exceeds Rs. 1 crore. EC of 2%, as well as SHEC of 1%, will be levied on the amount of income-tax plus surcharge where a surcharge is levied.
  7. In the case where the income of an individual is more than Rs. 1 crore, the amount payable as income-tax and surcharge cannot more than the total amount paid as income tax on total revenues of Rs. 1 crore by more than the amount of income above Rs. 1 crore.
  8. For non-corporate taxpayer provisions of Alternate Minimum Tax (AMT) applies, the amount of tax payable could not be less than 18.5% (+SC+EC+SHEC) of “adjusted total income” computed as per section 115JC.
  9. In a case where net income of a resident individual does not exceed Rs. 5,00,000 is given rebate as per section 87A. It is deductible from tax before calculating education cess. The amount of rebate is calculated in context to 100 per cent of income-tax or Rs. 5,000, whichever is lesser.

Income Tax Slab for Resident individual of the age of 80 years or above i.e. born  during   01/04/1957 (Super Senior Citizen)

  1. A resident individual whose annual income does not exceed Rs. 5,00,000 is given tax relief. He is not liable to pay any income tax.
  2. A resident individual whose annual income exeedsRs.5,00,000 but less than Rs.10,00,000 is liable to pay 20% tax on the income  above Rs. 1,00,000.
  3. In a case where annual income of a resident individual exceeds Rs.10,00,000, the payable income tax will be Rs. 1,00,000 + 30% tax on the total income above Rs. 10,00,000.
  4. Educational Cess, as well as Secondary and Higher Educational Cell, is Nil up to the income of Rs.5,00,000. Education Cess is 2% of income tax whereas as Secondary and Higher Educational Cell is 1% of income tax is applicable in a case where income exceeds above Rs. 5,00,000.
  5. The surcharge is applicable @ 15% on the amount of income-tax where net income exceeds Rs. 1 crore. EC of 2%, as well as SHEC of 1%, will be levied on the amount of income-tax plus surcharge where a surcharge is levied.
  6. In the case where the income of an individual is more than Rs. 1 crore, the amount payable as income-tax and surcharge cannot more than the total amount paid as income tax on total income of Rs. 1 crore by more than the amount of income above Rs. 1 crore.
  7. For non-corporate taxpayer provisions of Alternate Minimum Tax (AMT) applies, the amount of tax payable could not be less than 18.5% (+SC+EC+SHEC) of adjusted total income computed as mentioned in

Income Tax Slab for Non-resident individual irrespective of age,  HUF, BOI , AOP and  Artificial Juridical Person

  1. A nonresident individual irrespective of age, HUF, BOI , AOP and  Artificial Juridical Person whose annual income does not exceed Rs. 2,50,000 is given tax relief and not  liable to pay any taxes.
  2. A nonresident individual is irrespective of age, HUF, BOI, AOP and  Artificial Juridical Person whose annual income exeedsRs.2,50,000  but less than Rs.5,00,000 is liable to pay 10% tax on the income  above Rs. 2,50,000.
  3. A nonresident individual is irrespective of age, HUF, BOI, AOP and  Artificial Juridical Person whose annual income exeedsRs.5,00,000  but less than Rs.10,00,000 is liable to pay Rs. 25000 + 20% tax on the income  above Rs. 5,00,000.
  4. In a case where annual income of a nonresident individual irrespective of age, HUF, BOI, AOP and  Artificial Juridical Person exceeds Rs.10,00,000, the payable income tax will be Rs. 1,25,000 + 30% tax  on the total income above Rs. 10,00,000.
  5. Educational Cess, as well as Secondary and Higher Educational Cell, is Nil up to the income of Rs.2,50,000. Education Cess is 2% of income tax whereas as Secondary and Higher Educational Cell is 1% of income tax is applicable in the case where income exceeds above Rs. 2,50,000.
  6. The surcharge is applicable @ 15% on the amount of income-tax where net income exceeds Rs. 1 crore. EC of 2%, as well as SHEC of 1%, will be levied on the amount of income-tax plus surcharge where a surcharge is levied.
  7. In the case where the income of an individual is more than Rs. 1 crore, the amount payable as income-tax and surcharge cannot more than the total amount paid as income tax on total income of Rs. 1 crore by more than the amount of income above Rs. 1 crore.
  8. For non-corporate taxpayer provisions of Alternate Minimum Tax (AMT) applies, the amount of tax payable could not be less than 18.5% (+SC+EC+SHEC) of adjusted total income computed as mentioned in section 115JC.

Income tax rate applicable to Co-operative Societies

Paragraph B of Part III of the First Schedule to the Bill has provided the provision of tax for co-operative societies. The same rates of income tax slab are going to be followed for the AY 2017-18 which were being imposed in the financial year 2015-16.

  1. The co-operative societies whose net income range is Rs. 10,000 is liable to pay income tax at the rate of 10%.
  2. The co-operative society whose net income range is above Rs. 10,000 but do not exceeds Rs. 20,000 is liable to pay Rs.1000 + 20% income tax on the income above Rs. 10,000.
  3. The co-operative society whose net income range is above Rs.20,000 is liable to pay Rs3000 +30%income tax on the income above Rs 20,000.
  4. Other than tax mentioned above Education Cess is applicable at the rate of 2% of income-tax and Secondary and Higher Education Cess is applicable at the rate of 1% of income-tax.
  5. The surcharge is applicable @ 12% on the amount of income-tax where net income exceeds Rs. 1 crore. EC of 2%, as well as SHEC of 1%, will be levied on the amount of income-tax plus surcharge where a surcharge is levied.
  6. In the case where the income of an individual is more than Rs. 1 crore, the amount payable as income-tax and surcharge cannot more than the total amount paid as income tax on total income of Rs. 1 crore by more than the amount of income above Rs. 1 crore.
  7. For non-corporate taxpayer provisions of Alternate Minimum Tax (AMT) applies, the amount of tax payable could not be less than 18.5% (+SC+EC+SHEC) of adjusted total income computed as mentioned in section 115JC.

 Income tax rate applicable to a Firm

  1. Paragraph C of Part III of the First Schedule to the Bill has provided the provision of tax for co-operative societies. The same rates of income tax slab are going to be followed for the AY 2017-18 which were being imposed in the financial year 2015-16.
  2. A firm is liable to pay income tax at the rate of 30%.
  3. Other than tax mentioned above Education Cess is applicable at the rate of 2% of income-tax and secondary and Higher Education Cess is applicable at the rate of 1% of income-tax.
  4. The surcharge is applicable @ 12% on the amount of income-tax where net income exceeds Rs. 1 crore. EC of 2%, as well as SHEC of 1%, will be levied on the amount of income-tax plus surcharge where a surcharge is levied.
  5. In the case where the income of an individual is more than Rs. 1 crore, the amount payable as income-tax and surcharge cannot be more than the total amount paid as income tax on total income of Rs. 1 crore by more than the amount of income above Rs. 1 crore.
  6. For non-corporate taxpayer provisions of Alternate Minimum Tax (AMT) applies, the amount of tax payable could not be less than 18.5% (+SC+EC+SHEC) of adjusted total income computed as mentioned in section 115JC.

 Income tax rate applicable to Domestic Company

  1. In the case where the turnover or gross income of a domestic company do not exceed Rs .5 crore company is liable to pay income tax at the rate of 29%.
  2. A domestic company whose turnover or gross income is more than Rs.5 crore is liable to pay income tax at a flat rate of 30%.
  3. Other than tax mentioned above Education Cess is applicable at the rate of 2% of income-tax and Secondary and Higher Education Cess is applicable at the rate of 1% of income-tax.
  4. Apart from tax at high rate, the surcharge is applicable at the rate of 7% on the amount of income tax if net income is more than Rs. 1 crore but lesser thanRs. 10 crore.
  5. The surcharge is applicable @ 12% on the amount of income-tax where net income is above Rs. 10 crores. EC of 2%, as well as SHEC of 1%, will be levied on the amount of income-tax plus surcharge where a surcharge is levied.
  6. *Marginal relief is given from surcharge where the net income of company is more than Rs. 1 crore but less than Rs. 10 crore ,in such a way that the amount payable as income-tax and surcharge cannot more than the total amount paid as income tax on total income of Rs. 1 crore by more than the amount of income above Rs. 1 crore.
  7. Marginal relief is given from surcharge where the net income of company is more than Rs. 10 crore, in such a way that the amount payable as income-tax and surcharge cannot more than the total amount paid as income tax on total income of Rs. 1 crore by more than the amount of income above Rs. 10 crore.
  8. For corporate taxpayer provisions of Minimum Alternate Tax (MAT ) applies, the amount of tax payable could not be less than 18.5% (+SC+EC+SHEC) of Book profit computed as mentioned in section 115JB.

 Income tax rates applicable to a foreign company

  1. In the case of an international company, Income tax is imposed at the flat rate of 40%. Other than 40% income tax, Education Cess is applicable at the rate of 2% of income-tax and secondary and higher Education Cess is applicable at the rate of 1% of income-tax.
  2. Apart from tax at above rate, the surcharge is applicable at the rate of 2% on the amount of income tax if net income is more than Rs. 1 crore but less than Rs. 10 crores.
  3. The surcharge is applicable @ 5% on the amount of income-tax if net income is above Rs. 10 crores. EC of 2%, as well as SHEC of 1%, will be levied on the amount of income-tax plus surcharge where a surcharge is levied.
  4. Marginal relief is given from surcharge where the net income of company is more than Rs. 1 crore but less than Rs. 10 crore ,in such a way that the amount payable as income-tax and surcharge cannot more than the total amount paid as income tax on total income of Rs. 1 crore by more than the amount of income above Rs. 1 crore.
  5. Marginal relief is given from surcharge where the net income of company is more than Rs. 10 crore, in such a way that the amount payable as income-tax and surcharge cannot more than the total amount paid as income tax on total income of Rs. 1 crore by more than the amount of income above Rs. 10 crore.
  6. For corporate taxpayer provisions of Minimum Alternate Tax (MAT ) applies, the amount of tax payable could not be less than 18.5% (+SC+EC+SHEC) of Book profit computed as mentioned in section 115JB.

 Income tax rates applicable to a to local Authorities

  1. In the case of local governments, Income tax is imposed at the flat rate of 30%. Other than 30% income tax, Education Cess is applicable at the rate of 2% of income-tax and Secondaryave up and Higher Education Cess is applicable at the rate of 1% of income-tax.
  2. The surcharge is applicable @ 12% on the amount of income-tax where net income exceeds Rs. 1 crore. EC of 2%, as well as SHEC of 1%, will be levied on the amount of income-tax plus surcharge where a surcharge is levied.
  3. In the case where the income of an individual is more than Rs. 1 crore, the amount payable as income-tax and surcharge cannot be more than the total amount paid as income tax on total income of Rs. 1 crore by more than the amount of income above Rs. 1 crore.
  4. For non-corporate taxpayer provisions of Alternate Minimum Tax (AMT) applies, the amount of tax payable could not be less than 18.5% (+SC+EC+SHEC) of adjusted total income computed as mentioned in section 115JC.

(* Marginal Relief: In the case where taxable income of an individual taxable is more than Rs. 1 crore, he is levied Surcharge at prescribed rates as per above-provided rates on Income Tax payable by him. In such a way, the amount of Income Tax and Surcharge cannot be more than the amount of income tax payable on a taxable income of Rs. 1 crore by more than the amount of increase in taxable income.)

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