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 5000The 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 | |
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