In the budget 2018, the Union Finance Minister Arun Jaitley didn’t introduce any significant changes in the income tax slabs and the applicable rates except raising the total cess on income tax to 4 per cent.
New Delhi: In the budget 2018, the Union Finance Minister Arun Jaitley didn’t introduce any significant changes in the income tax slabs and the applicable rates except raising the total cess on income tax to 4 per cent. The income tax slabs and exemption limits for the assessment year 2019-2020 and financial year 2018-2019 have been sub-categorised on the basis of age and residential status. There have been various investment options available for resident Indian which helps in bringing down the taxable income.
With the help of such investments, an individual can claim income tax deductions on the total income under Section 80C to 80U of the Income Tax Act. Tax savings investment options such as Public Provident Fund (PPF), National Saving Certificates (NSC), Sukanya Samriddhi Account, National Pension Scheme (NPS), Senior Citizen Saving Scheme (SCSS), Equity-Linked Savings Scheme (ELSS) and several others offer income tax deductions of up to Rs 1.5 lakh under Section 80C.
According to the present income tax slabs, all the resident individuals with an income of over Rs 2.5 lakh per year have been taxed under the various tax slabs applicable. For individuals of up to 60 years of age, income of up to Rs 2.5 lakh exempt from tax, a 5 per cent tax is levied on income from Rs 2,50,001 to Rs 5,00,000, a 20 per cent tax is applicable on income from Rs 5,00,001 to Rs 10,00,000 and individuals having income of more than Rs 10 lakh are required to pay a 30 per cent income tax.
For senior citizens (within the age bracket of between 60 and 80) and super senior citizens (aged 80 years and above), the government have made certain relaxations with regard to tax exemption limits. For senior citizens, income of up to Rs 3 lakh is exempt from tax, a 5 per cent tax is levied on income between Rs 3,00,001 and Rs 5,00,000, 20 per cent tax is levied on income from Rs 5,00,001 to Rs 10,00,000 and a 30 per cent tax is applicable on an annual income of more than Rs 10 lakh.
For super senior citizens, all the tax slabs and applicable rates are similar except the tax exemption limit. Super senior citizens having an annual income of up to Rs 5,00,000 are exempt from paying income tax.
Other than the regular income tax slabs, an education cess at the rate of 2 per cent, and secondary cess of 1 per cent are derived on the applicable income tax separately. Additionally, a surcharge at the rate of 15 per cent is applicable on income tax if the net income exceeds Rs 1 crore and 10 per cent where net income is between Rs 50 lakh and Rs 1 crore.