7 changes that affect income tax return filing this year

By Abhishek Soni, CA and CEO, Tax2win.in 

Like every year, income tax return filing is going to be little different this year as well. So, before you begin filing your income tax return, let's see what has changed in income tax return filing this year. 

1. Disclosure and linking of Aadhaar Number: 
From 1st July onwards, the quoting of your Aadhaar number in your ITR is mandatory. If you don't have one, but have filed an application for the same, then the 28 digit Aadhaar Enrolment number is required to be quoted in the ITR. 

In addition to this, you are required to link your Aadhaar number with the PAN number as a precondition for filing your Income Tax Return. This follows from a recent CBDT press release clarifying the impact of the Supreme Court judgement on Aadhaar -PAN linkage. 

The release stated, among other things: Everyone who has been allotted permanent account number as on the 1st day of July 2017, and who has Aadhaar number or is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to income tax authorities for the purpose of linking PAN with Aadhaar. 

Additionally, it has been practically observed that income tax servers are not accepting ITRs unless your PAN is linked with your Aadhaar.

2. Impact of demonetization: 

If you have deposited cash equal to or more than Rs 2,00,000 in aggregate - old as well as new currency notes - in any of your Bank Account, be it Savings, Current or even a Loan Account) between 9th November, 2016 to 30th December 2016, the same has to be reported by you at the time of filing income tax return. This applies for all the ITR forms including the ITR 1 (Sahaj). 

3. Change in ITR form numbers: 

For simplification, the Income Tax Department has changed Income Tax Return form numbers. Following Forms are to be filled for assessment year 2017-2018, relevant for Financial Year 2016-17 return filing: 
a) ITR 1 (Sahaj): For Individuals having Income from Salaries, one house property, other sources (Interest etc.) and having total income of up to Rs 50 lakh; 

b) ITR 2: For Individuals and Hindu Undivided Families (HUFs) not carrying out a business or profession. This ITR has merged Form ITR 2/2A and 3 which were applicable for F.Y. 2015-16; 

c) ITR 3: For individuals and HUFs having income from a proprietary business or profession. This form is renumbered and replaced ITR 4 applicable for F.Y. 2015-16; 

d) ITR 4 (Sugam): For presumptive income from Business & Profession. It has replaced ITR 4S (Sugam) used for F.Y. 2015-16; 

Other forms remain the same. 

4. Filing of your ITR is mandatory even if you have only exempt long term capital gains (LTCG): 

In case your aggregate income including tax-exempt Long Term Capital Gains (LTCG) exceeds Rs 2,50,000, i.e. the basic exemption limit, you will have to file your income tax return as per the amendment made in the last provision of section 139(1) of the Income Tax Act. 

This means that even if your taxable income is less than the basic exemption limit of Rs 2,50,000 but because of exempt LTCG income, the total amount exceeds Rs 2,50,000, then filing of return of income is mandatory. 

For example, your taxable income from all the sources is Rs 2, 00,000 before deduction of chapter VIA deductions, and then normally you are not required to file your return. But, if you have an exempt LTCG income of say Rs 1, 50,000, then, since your taxable income plus income from exempt LTCG exceeds the basic exemption limit of Rs 2,50,000, it will be mandatory to file your return of income. 

As per section 10(38), long-term capital gain arising on transfer of equity share or units of equity oriented mutual fund (*) or units of business trust is not chargeable to tax in the hands of any person, if following conditions are satisfied: The transaction i.e. the transaction of sale of equity shares or units of an equity oriented mutual fund or units of business trust should be liable to securities transaction tax. 

Such shares/units should be long-term capital asset as defined in the Income Tax Act. Transfer should have taken place on or after 01.10.2004. 

5. Increased Rebate u/s 87A: 
Section 87A of the Income Tax Act allows a rebate of up to Rs 5,000 for individuals whose taxable income (total income minus deductions under section 80) is Rs 5,00,000 or less. However, if your tax liability is lower than Rs 5,000 then the amount of rebate will be restricted to your tax liability. The amount of rebate earlier was Rs. 2000/-. 

6. Additional Benefit for 1st Time home Owners (Sec 80EE): 
For taxpayers who do not own any house, the Finance Act 2016 had introduced a new Section 80EE. Under this section, you can claim deduction for the interest paid up to Rs 50,000 for loan taken for a residential house. This would be in addition to the deduction of Rs. 2 Lacs under section 24(b). For availing this benefit, you need to satisfy certain conditions. 

The first condition is that the loan should have been sanctioned between 1st April, 2016 to 31st March, 2017 and the amount of the loan should not exceed Rs. 35 lakhs for a residential house cost and the cost of this house does not exceed Rs. 50 lakh. Moreover, you should not be the owner of any residential house at the time of sanction of the house. 

However there are no restrictions on your owning any commercial property or even a residential house later on as the condition of not owning house needs to be satisfied at the point of sanction of the loan and not continuously. This benefit unlike Section 24(b) and 80 C can be claimed during construction of the house and not necessarily after completion of the construction of the house. 

7. Exemption from LTCG for Investment in Startups 
This tax filing season, you can reap the benefits of investing in a startup under section 54GB. As per this section, if you have earned Long Term Capital Gains by selling your house or land, and have invested such income in equity shares of a startup business then such gain will not be taxed. 

However, such investment in shares should be made before filing your Income Tax Return and the return should be filed before due date. Further, as a condition, the startup company has to invest this amount to purchase new plant and machinery within 1 year from the date of subscription of equity shares by you, otherwise, such exempt LTCG would be made taxable. 

Taxpayers need to obtain the proofs from the Company to show that it has bought new plant and machinery. Proof may consist of the Invoice copy, bank payment and agreements etc.

How to file income tax returns if you don’t have Form 16

The financial year ended in March and individuals are frantically trying to file their tax returns by the due date of July 31st. If you are a salaried employee, you must have received Form 16 from your employer. This is a very important form, which is required when you are filing your taxes yourself or if you are taking professional help for the same. Being a salaried employee, you should be conversant with the meaning of Form 16. But, what if you are not? What if you are a new employee still grasping at financial straws to make sense of filing your taxes? Wouldn't you need help?

Of course you would! So, let's understand what Form 16 exactly is.

Form 16

Employers generally deduct TDS from your salary. In that case, the Income Tax Act mandates your employer to issue a certificate detailing the TDS deducted and deposited. Thus, Form 16 is that certificate which your employer issues detailing your taxable income and the TDS already deducted.

Why is Form 16 required?

The form contains the details of the TDS already deposited by your employer, so it helps you in estimation of your correct tax liability.

What if you don't have Form 16?

Though it is highly improbable, you might not get Form 16 from your employer due to unavoidable circumstances. This does not, however, mean that you cannot file your taxes correctly. Taxes can be filed even without a Form 16 if you know how. So, here are the steps which can be followed for filing your Income Tax Returns even if you don't have a Form 16.

Filing income tax without Form 16

Step 1 - Accumulate all your payslips

While Form 16 lists your taxable income, the same can be found out from your Payslips as well. So, start by collecting your Payslips to figure out what your taxable income actually is.

Step 2 - Make use of Form 26AS

Form 26AS is an annual statement which shows your tax related information. It highlights the tax received by the Government through TDS deducted on your incomes from all sources. Your Payslips show the salary you received and Form 26AS shows the TDS already deducted from the salary. Both these documents can be used to find out the tax your employer deducted by way of TDS.

Step 3 - Compute and claim your deductions

There are various types of deductions which you can claim from your salary income. These are non-taxable items which lower your taxable income and include House Rent Allowance, Leave Travel Allowance, reimbursements, Section 80C deductions on investments, etc.

Step 4 - Add income from all other sources

Besides your salary income, you might have income from other sources as well. For instance, you might have interest income from your savings bank account or Fixed Deposit account, gains from shares and mutual funds, rent income, capital gains, etc. Add up these incomes to your salary income if they are taxable.

Step 5 - Identify the tax filing form

You should know which tax form should be perused if you are filing your taxes yourself. As a salaried employee, the relevant tax forms for you include ITR 1, ITR 2, ITR 2A, Form 3, Form 4 and Form 4A. Use the relevant form for filling up your income details. If you are using ITR 2, ITR 2A and ITR 4, you would have to provide a detailed salary break-up showing allowances and perquisites and whether or not they are taxable.

Step 6 - Compute your tax liability

After you have followed the above steps, you would have the numbers to calculate your tax liability. The next step, therefore, would be to find out what is your actual tax liability. Compare the figure with the TDS already deposited. If your TDS deposition is higher than the actual tax liability, you can claim a tax refund. On the contrary, if your tax liability is higher than the TDS deposited, you would have to pay additional tax.

Step 7 - File your return

After filling up the ITR form, submit it and file your return by July 31st.

How to Calculate Income Tax on Salary ?

Income Tax is the amount of money you pay as tax depending on the tax slab you fall under in accordance with your income. To know how to calculate Income Tax on your Salary, let’s see the Income Slabs and the tax rate applicable in the financial year 2017-18:

Upto 2.5 lakhs- No tax

Rs.2.5 lakhs to 5lakhs- 5%

Rs.5 lakhs to 10 lakhs- 20%

Above Rs.10 lakhs - 30%

Now let’s understand the composition of your Salary:

What is Gross Salary?

Basic Pay 

+ House Rent Allowance (HRA)

+ Dearness Allowance (DA)

+ Transport Allowance (TA)

+ Special Allowance 

+ other Allowance 

+ Leave Encashment

+ Gratuity Received

= Gross Salary

What are the Deductions from Salaried Income?

You can claim deductions from your salaried income under the following heads:

HRA Exemption based on the below three:

- the actual amount of HRA

- 50% of your basic pay (employees living in metro cities) or 40% (employees living in non-metro cities)

- Additional rent paid above 10% of salary

LTA Exemption

The LTA exemption is given to a certain extent of the LTA paid by the employer to the employee for his vacation in India. An employee has to submit bills in order to claim LTA.

Exemption on Encashment of Leaves

Encashing the unavailed leaves is exempted from income tax and hence can be claimed under exemptions.

Income Tax Deductions from Section 80C to 80U

There are various investment instruments like PPF, Life Insurance, Tuition Fees paid (upto two children), fixed deposit, etc which are exempted from Income Tax.

Interest on Home Loan

If you have a home loan running, then you can claim tax exemption upto an extent from the amount you have paid as interest on home loan.

Professional Tax

Professional Tax is allowed as a deduction from your gross salaried income.

Entertainment Allowance

Any income received under this head is exempted from income tax.

How Income Tax on Salary is Calculated?

The Total Taxable Income from Salary is calculated after all applicable deductions stated above are adjusted from the total income (gross salary + income from other sources). And then the income tax is calculated according to the slab your taxable income falls under + 3% Cess. For example if your taxable income falls under the tax slab 5 lac to 10 lac, then the amount till 2.5 lacs will be exempted, from 2.5 lacs to 5 lacs will be taxed 5%. And the amount between 5 to 10 lac will be levied 20% tax + 3% Cess.

Indirect Tax

What is the Meaning of Indirect Taxes?

Indirect tax is a type of tax collected by the government from an intermediary such as manufacturer or retailer. The eventual burden of the tax falls on to consumers who buy goods and services from the intermediary, as the intermediary applies indirect taxes on the product in the form of Value Added Tax (VAT), service tax, sales tax etc.

Indirect taxes are called so because they are collected indirectly from consumers by the government through intermediaries, who are the first payers of the tax to the government. These taxes are different from direct taxes such as income tax which is collected directly from taxpayers. Indirect taxes include taxes such as Sales Tax, service, tax, VAT etc. whereas income tax, wealth tax, corporation tax etc. fall under the ambit of direct taxes.

Unlike direct taxes, indirect taxes are levied on goods and services rather than individuals. Individuals pay the taxes indirectly in the form of higher prices on their purchases. A retailer selling a product to you has already levied indirect taxes on the product, which is then passed on to the relevant tax-collection authorities.

Indirect Tax in India:

There are a number of indirect taxes applied by the government. Taxes are levied on import, manufacture, sale and even purchases of goods and services. These laws aren’t also well-defined in terms of Acts from the government, rather orders, circulars and notifications are given out by relevant government bodies to this end. As such, it can be cumbersome trying to understand every feature of indirect taxes in India.

Indirect taxes are touted to be streamlined following the introduction of the uniform Goods and Services Tax (GST). The GST is under deliberation in the parliament and may be approved by mid-2016. The points below will help you understand more about the types of indirect taxes and where they are applicable from a consumer’s perspective.

Features of Indirect Taxes:

• Levied on goods and services sold by an intermediary to final consumers. Consumers than pay the tax in the form of higher price of items.
• Broadly divided into categories such as sale of goods, imported/exported goods, offering of services and manufacture of goods.
• Indirect taxes are levied on clearance of goods and services from the origin, instead of actual sale of the products to the customers. What this means is that the intermediary will pay excise duties irrespective of whether they could sell the good or service to consumers.
• Indirect taxes fall under both the central and state governments according to specific type of indirect tax. For instance, VAT is levied by the state governments whereas CST is levied by the central government.

Types of Indirect Taxes:

Indirect taxes is a broad category under which different kinds of indirect taxes fall. There are 4 basic sub-categories with further sub-divisions according to goods and services.

List of Indirect Taxes or Examples of Indirect Taxes:

• Service tax
• Excise duties
• VAT

Service Tax:

Service tax is applied generally at the rate of 12.36%, which has been revised to 14% from April 2015. This type of indirect tax is levied by the service tax provider and paid by the recipient of the services. However, in some cases the liability for the tax is divided between the recipient as well as the provider of service.

There is also a provision for abatement of service tax if the final price is a mixture of services as well as material, such as restaurant bills. In general, restaurants levy service tax on 40% of the bill amount as 60% of the amount is considered to be cost of materials. Service taxes fall under the ambit of the central government.

Manufactured Goods:

The central government collects excise duties on manufacture of goods subject to clearance of the products from warehouse or factory. As such, this tax can be said to apply on clearance of goods from storage rather than being applied on the sale of the manufactured goods. Excise duties are further divided into 4 categories, of which basic excise duty is levied for the most part while the others are levied only in special cases.

1. Basic excise duty: This is the most common type of excise duty which is levied on goods manufacturing and falls under the Central Excise Act, 1944. This tax is exempted in special cases such as manufacture of salt or export of manufactured goods of less than Rs.1.5 crores overall value per year, among others. The excise duty rates vary from product to product.
2. Special excise duty: Levied on a small list of items and falls under Central Excise Tariff Act, 1985.
3. Textile duties: As the name suggests, only applicable on specific textile goods and falls under the Additional Duties of Excise Act, 1978.
4. Goods of special importance: This is levied as per the Additional Duties of Excise Act, 1957 on specific goods mentioned under the article.
5. National calamity contingent duty (NCCD): This is levied on goods like cigarettes, chewing tobacco, pan masala, mobile phones and crude oil, and is applicable U/S 135 of the Finance Act, 2001.

Imported Goods:

Imported goods are charged taxes as per excise duties. This is further divides in specific duties and ad-valorem duties.

1. Specific duties: These are applicable on all individual components of a good imported into the country, for instance a cloth imported from abroad will be charged excise per meter of the material, or laptops imported will be charged excise on each unit of the order.
2. Ad-valorem duties: These are levied on the overall value of goods exported or imported. For instance, 10% of the overall bill of imported clothes or 10% of the overall order value for laptops.
3. Anti-dumping duties: These are levied so as to shield the domestic market against foreign goods dumped at very low or below cost prices. For instance, plastic products imported from China, which can be cheaper than the domestic market rates.
4. Countervailing Duty of Customs: This is another type of excise duty used to help Indian produced goods sell on a level playing field. This is additional to the ad-valorem or specific duties already applied on goods.

Goods Sold:

Finally, goods sold directly to consumers are levied Value Added Taxes (VAT), which is collected by the respective state government on intra-state sales, as well as Central Sales Tax, which is collected by the central government on inter-state sales. Every state levies its own VAT figure, which usually lies between 5% and 12.5%. There may be some exceptions to this tax as per state laws.

Apart from all the types of indirect taxes discussed above, Octroi or Local Body Taxes (LBT) are also applicable as per local rules and regulations.

Advantages of Indirect Tax

Indirect Tax comes with a number of advantages. Some of these are -

• Convenience

Indirect taxes are so called because they are paid for directly by the taxpayer to the government but through the goods and services that they consume. Due to the nature of this tax, consumers do not feel as deep a pinch in their pocket as they would if they paid this amount all at once to the government. Indirect taxes are paid in small amounts and only when purchasing certain goods and services. Also this tax is a part of the price of the product and is not separate, hence will have to be paid when the product is being purchased.

Indirect taxes are also convenient from the point of view of the government as well as they can collect the said tax at the factory or port directly from the traders or manufacturers.

• Hard to evade

Most individuals try to evade paying taxes and usually through illegal methods. However, through the concept of indirect taxes, evasion becomes very hard. This is because indirect tax is paid by the customer not to the government to the seller of the product or service that they are purchasing and these costs are a part of the actual price of the product. Hence, they have no way of evading this tax.

• Coverage and Elasticity

Unlike direct taxes, a large number of services and products come with indirect taxes hence individuals do not have a choice but to pay this tax. If not, they will have to forgo the product or service they wanted.

Whenever the government believes that its revenue needs to increase, taxes can be increased wherein indirect taxes provides a lot of revenue to the government.

• Universality and Influence

Indirect taxes are paid by everyone regardless of their class or economic status depending on the type of product and service procured.

The government can allocate resources better and understand the spending habits of individuals by imposing taxes on specific sectors or commodities such as luxury goods and other niche services.

The money collected through indirect taxes can be used for positive purpose such as social welfare and infrastructure. Indirect taxes are also flexible.

Difference between Direct Tax and Indirect Tax

• Direct tax is referred to the type of tax that is levied on an individual’s wealth and income and is paid to the government directly. Indirect tax is levied on an individual who consumes products and services and is paid indirectly to the government as the price of the particular product or service comprises of the tax amount as well.
• Direct Tax is progressive in nature whereas Indirect tax is regressive.
• Examples of Direct Tax includes Wealth Tax, Property Tax, Income Tax, Import and Export Duties and Corporate Tax.
• Example of Indirect Tax includes VAT or Value Added Tax, Service Tax, Central Sales tax, Custom Duty, Excise Duty, Security Transaction Tax and so on.
• Tax evasion is possible with Direct Tax but is not the case with Indirect Tax.
• Direct Tax helps to reduce inflation whereas Indirect tax promotes inflation.
• Direct Tax is collected from and imposed on assessees such as Individuals, Hindu Undivided Family, Firm, Company and so on.
• Indirect Tax is collected from those consumers of products and services but is deposited and paid by the assessee.
• Burden of Direct Tax cannot be shifted but can be shifted in case of Indirect tax.

Is Withholding Tax an Indirect Tax ?

Withholding Tax which is also known as retention tax is a government requirement for the payer of income to deduct or withhold tax from the payment and subsequently pay that tax to the government. The amount that is withheld ats as a credit against the income taxes that the employee will have to pay during the year.

Withholding tax is not an indirect tax but comes under the bracket of direct tax.

Payment of Indirect Tax

Indirect tax is paid by the customer indirectly to the government, as the name suggests, when they pay for a particular product or service. The amount that is paid for the particular goods/product or service is inclusive of the tax amount and is therefore a more convenient method of paying this particular tax.

Income Tax Slab

Income Tax Slabs for FY 2017-18 (AY 2018-19) and FY 2016-17 (AY 2017-18)

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.


New Income Tax Slab Rates for FY 2017-18 (AY 2018-19) - Budget 2017

In what could be the best possible news of the year for taxpayers, as per the Budget for the fiscal year 2017-18 announced by Finance Minister Arun Jaitley new income tax slabs have been announced.

The Finance Minister also announced that income tax for small companies with an annual turnover of Rs.50 crore would be reduced. Income tax has been reduced to 25% from the previous rate of 30%. It was also announced that all individuals who earn less than Rs.5 lakh per year will have to file a one page I-T return form. The revised tax rates are as given below -

Income tax slab for individual tax payers & HUF (less than 60 years old) (both men & women)

Income Tax Slab	Tax Rate
Income up to Rs. 2,50,000*	No Tax
Income from Rs. 2,50,000 – Rs. 5,00,000	5%
Income from Rs. 5,00,000 – 10,00,000	20%
Income more than Rs. 10,00,000	30%
Surcharge: 10% of income tax, where total income is between Rs. 50 lakhs and Rs.1 crore. 15% of income tax, where total income exceeds Rs. 1 crore.
Cess: 3% on total of income tax + surcharge.
* Income upto Rs. 2,50,000 is exempt from tax if you are less than 60 years old.

Income tax slab for individual tax payers & HUF (60 years old or more but less than 80 years old) (both men & women)

Income Tax Slab	Tax Rate
Income up to Rs. 3,00,000*	No Tax
Income from Rs. 3,00,000 – Rs. 5,00,000	5%
Income from Rs. 5,00,000 – 10,00,000	20%
Income more than Rs. 10,00,000	30%
Surcharge: 10% of income tax, where total income is between Rs. 50 lakhs and Rs.1 crore. 15% of income tax, where total income exceeds Rs.1 crore.
Cess: 3% on total of income tax + surcharge.
* Income up to Rs. 3,00,000 is exempt from tax if you are more than 60 years but less than 80 years of age.

Income tax slab for super senior citizens (80 years old or more) (both men & women)

Income Tax Slab	Tax Rate
Income up to Rs. 2,50,000*	No Tax
Income up to Rs. 5,00,000*	No Tax
Income from Rs. 5,00,000 – 10,00,000	20%
Income more than Rs. 10,00,000	30%
Surcharge: 10% of income tax, where total income is between Rs. 50 lakhs and Rs.1 crore. 15% of income tax, where total income exceeds Rs.1 crore.
Cess: 3% on total of income tax + surcharge.
*Income up to Rs. 5,00,000 is exempt from tax if you are more than 80 years old.

Customers should note that the Income Tax Exemption limit per FA 2016 is up to a maximum of Rs.2,50,000 for all individuals and HUF other than those who are covered in Part(II) or Part(III).

Income Tax Slab Rates for FY 2016-17 (AY 2017-18)

These income tax slab rates are also applicable for :

* FY 2015-16 (AY 2016-17)

* FY 2014-15 (AY 2015-16)

1. Income Tax Slab for Individual Tax Payers :

Income Tax Slab	Rate
Up to Rs.2,50,000	No tax
Rs.2,50,000 to Rs.5,00,000	10%
Rs.5,00,000 to Rs.10,00,000	20%
Over Rs.10,00,000	30%















Surcharge: If income is greater than Rs.1,00,00,000 – 12% of income tax amount. Subject to marginal relief.Plus:
• 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).

2. Income Tax Slab for Hindu Undivided Families (HUF) :

Income Tax Slab	Rate
Up to Rs.2,50,000	No tax
Rs.2,50,000 to Rs.5,00,000	10%
Rs.5,00,000 to Rs.10,00,000	20%
Over Rs.10,00,000	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.
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).

3. Income Tax Slab for legal Entities Registered as Associations of Persons :

Income Tax Slab	Rate
Up to Rs.2,50,000	No tax
Rs.2,50,000 to Rs.5,00,000	10%
Rs.5,00,000 to Rs.10,00,000	20%
Over Rs.10,00,000	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.
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).

4. Income Tax Slab for Legal Entities Registered as Bodies of Individuals :

Income Tax Slab	Rate
Up to Rs.2,50,000	No tax
Rs.2,50,000 to Rs.5,00,000	10%
Rs.5,00,000 to Rs.10,00,000	20%
Over Rs.10,00,000	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.
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).
5. Income Tax Slab for Other Artificial Judicial Persons :

Income Tax Slab	Rate
Up to Rs.2,50,000	No tax
Rs.2,50,000 to Rs.5,00,000	10%
Rs.5,00,000 to Rs.10,00,000	20%
Over Rs.10,00,000	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.
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).

6. For Resident Senior Citizens (Over the Age of 60, and Under the Age of 80 on the last day of the Previous Year) :

Income Tax Slab	Rate
Up to Rs.3,00,000	No tax
Rs.3,00,000 to Rs.5,00,000	10%
Rs.5,00,000 to Rs.10,00,000	20%
Over Rs.10,00,000	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.
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).

7. For Resident Super Senior Citizens (who are over the age of 80 as on the last day of the Previous Year) :

Income Tax Slab	Rate
Up to Rs.5,00,000	No tax
Rs.5,00,000 to Rs.10,00,000	20%
Over Rs.10,00,000	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.

8. For Partnership Firms:

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.

9. For Local Authorities :

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.

10. For Domestic Companies :

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.

11. For Foreign Companies :

Nature	Rate
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 income	40%

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.

12. For Co-operative Societies :

Income Tax Slab	Rate
Up to Rs.10,000	10%
Rs.10,000 to Rs.20,000	20%
Over Rs.20,000	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.