What are the Income Tax Slabs and Tax Deductions for Financial Year: 2016-17?

“In this world, nothing is certain but death & taxes”: Benjamin Franklin

Though a certain tax outgo is essential and you can’t avoid it, you can invest in different insurance and investment products to lower your tax payment. However, to save tax, it is important to know under which slab your income falls.
 
Income tax slabs for Financial Year 2016-17
Income Range Individuals below the age of 60 years Senior Citizens (aged 60 years but less than 80 years) Very Senior Citizens (aged 80 years and above)
Up to 2,50,000 Nil Nil Nil
2,50,001 to 3,00,000 10% of total income exceeding          2,50,000 Nil Nil
3,00,001-5,00,000 10% of total income exceeding           2,50,000 10% of total income exceeding   3,00,000 Nil
5,00,001 to 10,00,000 25,000 + 20% of total income exceeding   5,00,000 20,000+20% of total income exceeding  5,00,000 20% of total income exceeding            5,00,000
Above   10,00,000 1,25,000 + 30% of total income exceeding   10,00,000 1,20,000 + 30% of total income                                 exceeding   10,00,000  1,00,000 + 30% of total income exceeding   10,00,000

 

  • Above rates do not include Surcharge and Cess.

  • The same income tax rates apply to both men and women

  • For individuals earning below 5 lakhs, tax rebate under section 87A has been increased from 2000 to 5000

  • The surcharge on income tax levied on individuals earning income above 1 crore has been increased to 15% from 12%

  • 2% Education CESS and 1% Secondary and Higher Education Cess is applicable on the income tax and applicable surcharge.

 

Now, let’s examine the salary components of X, Y, and Z, who are in their mid-thirties, and work in an IT firm, to understand tax slabs 
  Particulars ()

X ()

Y ()

Z ()

  Annual Salary 5,00,000 10,00,000 15,00,000
  Less: Medical Reimbursement

15,000

15,000

15,000

  Less : Provident Fund deduction u/s 80C

24,000

48,000

72,000

  Gross Taxable Income (GTI) 4,61,000 9,37,000 14,13,000
  Tax computation on GTI
  Up to 2,50,000

-

-

-

  2,50,001 to 5,00,000

21,100

25,000

25,000

  5,00,001-10,00,000

-

87,400

1,00,000

  Above 10,00,001

-

-

1,23,900

A Total Tax

21,100

1,12,400

2,48,900

B Less Rebate u/s 87A 5,000

-

-

C 2% Education & 1% Secondary & Higher Education Cess on (A-B)

483

3,372

7,467

  Tax Payable (A-B+C) 16,583 1,15,772 2,56,367

Calculate your income tax now!

 

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Comp/doc/Aug/2016/457
 
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