New Income Tax Slabs – FY 2017 – 2018 : New Tax Structure in Union Budget 2017


Union Budget 2017-18: Income Tax rate reduced, earning upto Rs 3 lakh not taxed !

Today, on February 1, 2017, Hon’ble Finance Minister, Mr. Arun Jaitley presented the Union Budget 2017-18 in the Parliament.

Every Indian citizen was hoping for tax relief in the Budget, especially after the Demonetization exercise conducted by Prime Minister Narendra Modi which affected everyone.

New Tax slabs in Union Budget 2017 for FY 2017 - 2018

People were also hoping that the Section 80C tax deduction limit be increased from Rs. 1,50,000 to at least Rs. 2,00,000.

FM Arun Jaitley did not disappoint the lower middle class people who come in the lowest tax bracket.

He halved the tax rate of 10% to 5 % for the first tax slab of taxable income between Rs. 2,50,000 to Rs. 4,99,000.

I am sure you all might be searching for New Income Tax Slabs – FY 2017 – 2018, New Tax Structure in Union Budget 2017, etc.

New Income Tax Slabs – FY 2017 – 2018 : New Tax Structure in Union Budget 2017 

In Union Budget 2016, applicable for FY 2016 – 2017 Income tax slabs for General Tax Payers (Indian Resident) are as follows:

For Men and Women below 60 years

Income tax slab (in Rs.) Tax
0 to 2,50,000 No tax
2,50,001 to 5,00,000 5%
5,00,001 to 10,00,000 20%
Above 10,00,000 30%

For Senior citizen (Aged 60 years but less than 80 years)

Income tax slab (in Rs.) Tax
0 to 3,00,000 No tax
3,00,001 to 5,00,000 5%
5,00,001 to 10,00,000 20%
Above 10,00,000 30%

For Very Senior citizen (Above 80 years)

Income tax slab (in Rs.) Tax
0 to 5,00,000 0%
5,00,001 to 10,00,000 20%
Above 10,00,000 30%

Surcharge

: 10% of the Income Tax, where taxable income is more than Rs. 50 lakhs and less than Rs. 1 Crore and 15 % of the Income Tax, where taxable income is more than Rs. 1 crore.

Education Cess : 3% of the total of Income Tax and Surcharge.

Now depending on which tax slab you fall in, you will have to pay income tax.

For people with net taxable income below Rs 3.5 lakh, the tax rebate has been reduced to Rs 2,500 u/s 87A

For people with net taxable income between Rs 3.5 lakh to Rs. 5 lakhs, the maximum tax rebate is unchanged at Rs. 5000/- u/s 87A.

No Changes or Increase in 80 C Exemption Limit.

Budget 2017 New Tax Slab Rates

Corporate Tax Changes in Union Budget 2017 :

Income tax rate for the Company will be 25% for the company having a turnover less than 50 crores. (MSMS’s)

MAT Credit period has been increased to 15 Years from 10 years.

Budget 2017 Incentives for Cashless Transactions :

Section 40 A(3) Any expenditure other than account payee cheque has been reduced to Rs 10,000 from Rs 20,000

Cash transaction limit is 3,00,000/-.

Limit under section 44 AD has been increased to Rs 2 Crore, the rate on Presumptive taxation will be 6 % for the transaction done in banks. Note the 6% limit will be applicable for the current year.

Income Tax Assessment Timeline :

Income tax assessment will be done in 18 months for AY 2018-19, currently time limit is 21 months.

Budget 2017 – Changes in Service tax and Excise

No change in service tax and excise, all change will happen in GST only which shall be implemented from 1st July 2017.