Income Tax Slab Rate:
Income tax slab rates are for different classes of taxpayers, who are taxed progressively more according to their earning. The income tax slab rates can be classified into the following categories:
1. Income Tax Slab for Individual & HUF ( age less than 60 years old)
| Income 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. | |
2. Income tax slab for individual tax payers & HUF (60 years old or more but less than 80 years old)
| Income 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. | |
3. Income tax slab for super senior citizens (80 years old or more)
| Income 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 | |
4. Income Tax Slab for Co-operative societies :
| Income Tax Slab | Tax Rates |
| Total income less than Rs.10,000. | 10% of the income. |
| Total income greater than Rs.10,000 but less than Rs.20,000. | 20% of the amount by which it exceeds Rs.10,000. |
| Total income greater than Rs.20,000. | 30% of the amount by which it exceeds Rs.20,000. |
5. Firms, Local Authorities, Corporates and Domestic Companies:
Companies are taxed at a flat rate of 30% on the total income declared.
A surcharge of 5% is levied on the total income tax of domestic companies if their income exceeds Rs.1 crore. This surcharge does not apply to firms and local authorities.
How to avail benefits under Section 80C
Broadly you can avail Section 80C benefits under two ways: expenditures and investment. Sukanya Samriddhi Scheme, PPF, insurance premium, , NSC, NPS, tax saver bank fixed deposits, ELSS, and Senior Citizens Savings Scheme are some of the investment schemes that offer tax deduction under Section 80C.
Your own contribution towards EPF is eligible for deduction under Section 80C of Income Tax Act.
Deductions under Section 80C are not only available for investments but also for specified expenditures made by the taxpayer.
Children's tuition fees: The tuition fee paid for the education of two children is eligible for tax deduction under Section 80C of up to Rs. 1.5 lakh a year.
Home loan principal payment, stamp duty and registration cost of the house at the purchase of house are some of the expenditures allowed for Section 80C deduction.
Some of the popular investment options that offer deductions under Section 80C
Tax-saving FDs
Interest on income tax-saving deposits is payable on a monthly or quarterly basis. The interest amount earned can be reinvested.
Tax-saving fixed deposits have a lock-in period of five years. No premature withdrawals or loans are allowed. The interest rate on tax-saving fixed deposits is typically the same as normal fixed deposits. SBI, for example, offers an interest rate of 6 per cent on tax-saving bank FD (6.50 per cent for senior citizens).
Public Provident Fund (PPF)
PPF is a popular small savings scheme which enjoys an EEE or exempt, exempt, exempt status in terms of income tax implication - contribution, interest and maturity proceeds all are tax free.
PPF accounts have a maturity period of 15 years and this can be extended in blocks of five years.
Interest rate on PPF is revised every quarter. Currently, 7.8 per cent is offered on PPF.
ELSS mutual funds
ELSS funds or tax-savings mutual funds are categorised as equity mutual funds. Gains for equity mutual fund units (SIP or lumpsum) held for more than 12 months are considered as long-term capital gains. There is no tax on long-term capital gains from equity funds.
ELSS funds have a lock-in period of three years.
Surcharge will be levied
@ 10 per cent of income-tax if net income is more than <SO lakh but not more than
<1 crore.
However, if net income is
more
than <1 crore, surcharge is 15% of income-tax.
Education Cess on I ncome
Tax :-
Education cess will be levied @ 2% on income tax including surcharge. Secondary
and Higher
Education Cess on Income-tax :
Secondary and Higher Education Cess on Income-tax will be levied
@ 1% on income tax including surcharge.
REBATE of 2.500 for resident individual having total income up to
3.50 Lacs [SECTI ON 87Al
The amount of rebate available
under section
87A is < 2,500/-
or the amount of tax payable, whichever is
less from AY 2018-19.
Page 2 of 12
B)
Deductions Under Chapter VI-A of the of the Income Tax Ac
t, 1961
Deductions Under Chapter VI-A of the of the Income Tax Ac
t, 1961
Various deductions are provided by the Income Tax
Act, 1961 while calculating the taxable income of the assessee. In order to avail all these
deductions
employees
are required to enter these investment details in HRMS under "Investment Declaration" Tab. The details
of various deductions are as under:-
a)
Section 80 C:-
This section entitles an employee to deductions for the whole of amounts paid or deposited in the current financial year in the schemes
like
contribution to PPF/SPF/RPF, ULIP, NSC, Tuition fees( for any 2 children) , unit linked insurance, UTl/MF/ULIP, Annuity Plan-LIC, Deferred Annuity on behalf of Government, Term Deposit (5 years or more tax shield FDR), Bond issued by NABARD, SCSS, 5 years Post Office Savings
Bank Account , Loan repayment for house construction/purchase subject to a limit
of 1,50.000.
b)
Section 80CCC:-
Contribution to certain
pension funds/Annuity Plan
of LIC:-
This section provides a deduction to an individual a deduction to an individual for any amount paid or deposited by him in any annuity plan of the Life Insurance Corporation of India or
any other insurer
for receiving pension from a fund referred
to in section 10(23AAB). The deduction
shall be restricted to 1,50,000.
However, where after claiming deduction, the assessee
or his nominee
surrenders the annuity
before the maturity
date of such annuity, the
surrender value shall be taxable in the hands of assessee or his nominee, as the case may be in the year of receipt. If deduction is claimed under section 80CCC, pension received will be taxable in the hands of the assessee or his
nominee as the case may be in
the year of receipt.
c)
Section 80CCD
Deduction in respect of contribution to National Pension Scheme
of Central Government:-
Section 80CCD(1)
- Contribution towards NPS by employee
Assessee's contribution to NPS (National Pension Scheme) is
deductible under section 80 CCD(1) in the year in which contribution is made. No deduction is available in respect of employee's contribution is
in excess of 1O percent of salary of the employee.
Section 80CCD(2) - Contribution towards
NPS by employer:-
Contribution to NPS by the employer to NPS (National Pension Scheme) is deductible
under section 80 CCD(2)
in the hands of the concerned employee in the year in which contribution is made. However, no deduction is available in respect of employer
's contribution which is in excess of 10 per cent of the salary of the employee .
Section 80CCD(1 b):- Additional deduction under section 80CCD(1
B)
From AY 2016-17,
an individual can avail additional rebate up to 50,000/- by paid or deposited
by the assessee to his account in a notified pension
scheme (i.e.
New
Pension Scheme)
over and above 1,50,000/- ceiling limit provided under section 80CCE.
y Page 3 of 12
Section 80 CCE
It is emphasized
that as per the section 80CCE the aggregate amount of deduction under sections 80C, 80CCC and Section 80CCD(1) shall not exceed <1,50,000/-. The deduction allowed
under section 80 CCD(1B) is an additional deduction in respect of any amount paid
in the NPS upto <
50,000/-. However, the contribution made by the Central Government or any other employer to a pension scheme u/s 80CC0(2) shall be excluded from the limit of <1,50,000/-
provided under this section.
d)
Section (80 CCG) - NEW
INVESTMENT SCHEME -
RAJIV GANDHI EQUITY SAVI NG SCHEME
From FY 2012-13 , a new investment scheme is added for Income Tax rebate under 80CCG for investment in
listed Top
100 equity shares
under equity saving scheme
i.e. Rajiv Gandhi Equity Saving Scheme, 2013 . For such scheme upto 50% of amount invested (Max. < 50000/-), subject to maximum deduction of <25000/- is allowable as deduction to a resident individual
being a new retail
investor
in the year relevant to such previous year provided the assessee total taxable income for that year does not exceed <12 Lacs as per Government Notification, NSDL and SEBI guidelines issued and the investment is locked- in
for the period of three years from the date of acquisition.
The deduction under
this sub section (1) shall be allowed in accordance with, and subject to the provision of this section for three consecutive assessment years, beginning with the assessment year in whic h such investment was first acquired
The deduction originally allowed shall be deemed to be the income of the assessee of such previous year in which assessee fails
to comply any
of the above conditions and shall be
liable to tax .
Deduction under this section is available up to the assessement year 2017-18. However, an assessee
who has claimed deduction under this section for assessment year 2017-18
and earlier assessment years shall be allowed deduction under this section till the assessment year 2019-20, if he is otherwise eligible to claim the deduction as per the provisions of this section.
e)
(Section 80D)- Deduction in respect of
health insurance premium paid, etc.
Under Section 800
pertaining to deduction in respect
of Medical Insurance Premium, the amount deductible is < 25,000.00 and in case of Senior Citizens the limit is
< 30,000/-. Medical Insurance Premium in respect of Parent(s) shall be eligible for an additional deduction up to <25000/- (< 30000/- in case of person insured is a Senior Citizen), the payment in respect of Medical Insurance Premium can be affected now by any other mode (other than cash also) including electronic mode, credit
card etc. Besides, the condition of dependency in relation to parents has also been removed. From 01.04.2012 deduction can also be availed
for any payment for preventive health check-up of the assessee
, his family and parents subject to a limit of
<5,000 within the aforesaid ceilings. This can be incurred even in cash.
Page 4 of 12
f)
Section SOU
-
Deductions i n respect of
a
person with disability (sect ion SOU)
Section SOU
-
Deductions i n respect of
a
person with disability (sect ion SOU)
Under Section 80U in case of assessee
who is a person being resident individual with disability can avail deduction
of
V5,000I-, in case
disability is of a severe nature, the deduction is 1.25,000/-.
Similarly an amount of 75,000/- for assessee who incur expenditure on medical treatment (including nursing)
, training and rehabilitation of any dependant being
a person with disability and 1,25,000/- in the case of severe disability under section 8000.
DDOs should note that 8000 deduction is in case of the disable dependent of the employee whereas
80U deduction is in case of the employee himself. However, under both the sections,
the employee shall furnish
to the ODO the following:
1.
A copy of the certificate issued by the medical authority as defined in Rule 11A(1) in the prescribed form as per Rule
11A(2) of the Rules. The ODO has to allow deduction
only after seeing that the Certificate furnished is from the Medical Authority
defined in this Rule and the same is in the form as mentioned therein.
2.
Further in cases where the condition of disability is temporary and requires reassessment of its extent after a period stipulated in the aforesa id certificate, no deduction under this section
shall be allowed for any subsequent period unless a new certificate is obtained from the medical authority as in 1 above and furnished before the ODO.
g) Section SODDB - Deduction
in respect of medical treatment
etc.
That deduction u/s 80008 - In respect of medical
treatment of specified disease under rule 11DD for which deduction is allowed in case of a resident
Individual equal to the expenditure incurred subject to maximum of 80,0001- in case of super senior citizen, 60000/- for senior citizen and 40,000/- in other cases on submission of prescription for such medical
treatment.
The aforesaid amount
of deduction will be reduced by the amount received , if any, under an insurance from an insurer or reimbursed by the employer .
h) Section SOE
- Deduction in respect of interest
on
loan taken
for higher education:-
Under Section 80E
pertaining to deduction
for interest paid on loan taken for pursuing higher education, the deduction of interest out of his income chargeable to tax is now allowed
in respect of loan taken by an individual for higher education extended to all post senior secondary study courses of his **relative also; whereas earlier this was allowed in respect of only self education of the borrower. The amount of interest paid during the year can be deducted from the taxable income till the loan including interest is cleared or for a period of Eight Years from the 1st year in wh ich assessee pays interest
on such loan, whichever is earlier.
** relative for the purpose of Secti on 80 ( E) shall mean
spouse and children of the individual. Besides. deduction can also be cl aimed in respect of whom assessee 1s the legal guardian.
Page 5 of 12
i) Section
BOEE - Deduction in respect of interest on loan taken for residential house property
Deduction subject
to
50,000/- is allowed to assessee , being an individual, for payment of interest on loan from any financial institution for the purpose of acquisition of a residential property. Provided such loan has been sectioned during
F.Y. 2016-17 , the amount of loan sanctioned does not exceed Rs.35 lac, value of residential property
does not exceed 50 lakh and the assessee does not own any residential house property on the date of sanction of
loan.
No deduction shall be allowed for such interest under any other provision of this Act for the same or any other
assessment year.
j) Section BOG - Deduction of donations to certain funds, charitable institutions etc.
Section BOG provides
for deductions on account of
donation made to various funds . charitable organizations etc.
In cases where employees make donations
to
the Prime Minister's National Relief Fund,
the Chief Minister's Relief Fund or the Lieutenant Governor's Relief Fund through
their respective employers, it is not possible for such funds to issue
separate certificate to every such employee in respect of donations made to such funds as contributio ns made to these funds are in the form of a consolidated cheque. An employee who makes donations towards these funds is eligible to
claim deduction under section
BOG. It is, hereby, clarified that the claim
in respect of such donations as indicated above will be admissible under section BOG on the basis of the certificate issued by the Drawing and Disbursing Officer
(DDO)/Employer in this behalf.
No
deduction under this section is allowable in case the amount of donation exceeds 2000 unless the amount is paid by any mode other than cash.
k)
Section BOTTA : Deduction
in
respect
of
interest
on
de pos its in sav ings account
Section BOTTA has been introduced from the Financial Year 2012-13 and it allows to an employee a deduction from his gross total income if
it includes any income
by way of interest on deposits (not being time deposits) in a savings account, a deduction amounting to:-
i)
in a case where the amount of such income does not exceed in the aggregate ten thousand rupees, the whole of such
amount; and
ii) in
any other
case, ten thousand rupees.
The deduction
is available if such savings
account is a maintained in a
a)
banking
company
to
which the Banking Regulation Act, 1949. applies (including any bank or banking institution referred
to
in section 51 of that Act) ;
banking
company
to
which the Banking Regulation Act, 1949. applies (including any bank or banking institution referred
to
in section 51 of that Act) ;
b)
co-operative society
engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank). or
c)
Post Office as
defined in clause (k) of section 2 of the Indian Post Office
Act. 1B9B,
B) Perquisite Valuation
The income tax act 1961,
provides
that taxable income under the
head salary shall be calculated after taking into account the following perquisites:-
a) Rent Free Accommodati on or Accommodat ion Provided At Concessional Rate
The rates are furnished below:-
a)
In respect
of accommodat ion provided in
Banks owned premises:
i.
15%
of salary in cities having population exceeding twenty five lacs as
per 2001 census.
ii.
10% of salary
in cities having population exceeding ten lacs but not exceeding twenty
five lacs as per 2001 census.
iii. 7.5% of salary
in any other place.
As reduced by the rent, if any actually paid by the employee.
b)
In respect
of accommodation provided
or taken on lease
by the employee I rent paid by the Bank, the perquisite value is 15% of the salary
or actual lease rental payable by the bank which
ever is lower as reduced by any amount of rent recovered from the employee
(standard deduction and any additional rent paid by employee).
Meaning of 'Salary ' 'for the Residential Accommodat ion:-
purpose of calculation of perquisite in respect of
|
|||
 |
|||
(i) Basic Salary ;
Basic Salary ;
(ii)
Dearness Allowance
,
or
Dearness Pay if it enters into the computation of superannuation or retirement benefit
of the employees ;
(iii) Bonus ;
(iv)
Commission ;
(v)
All other taxable allowances (excluding the portion not taxable );
and
(vi) Any monetary payment which is chargeable to tax (by whatever name called).
Salary from all employers shall
be taken into consideration in respect of the period during which an accommodation is provided. Where on account of the transfer of an employee from one place to another, he is provided with accommoda tion at the new place of posting
while retaining the accommodat ion at the other place, the value of perquisite shall be determined with reference
to only one such accommodation which has the lower value for a period not exceeding 90 days and thereafte r the value of perquisite shall be charged
for both such accommodation.
c)
Furnished Accommodation in a Hotel:
The value of perquisite shall be determined on the basis
of lower of the following two:
1.
24% of salary
paid
or
payable
in respect
of
period during which the accommodation is provided; or
2.
Actual charges
paid or payable by the employer to such hotel,
for the period during which such accommodation is provided as reduced by
any
rent
actua lly paid or payable by the employee . However, nothing in ( c) shall be taxable if following two conditions are satisfied :
a.
The hotel accommodation is provided for a total period not exceeding in aggregate 15 days in a previous year, and
b.
Such accommodation is provided on an employee's transfer from one place to another place.
It may be clarified
that while services provided as an integral part of the accommodation , need not be valued separately as perquisite, any other services over and above
that for which the employer
makes payment or reimburses the employee shall be valued as a perquisite
as per the residua l clause. In other words
, composite tariff for accommodation will be valued as per the Rules and any other charges for other facilities provided by the hotel will be separately valued under the residual clause.
b)
Perqui si te valuation in respect of Furniture
facil ity at residence:
|
10% p.a. of the cost
of furniture provided by the employer (excluding laptop/computers) or actual hire charaes if hired
bv emolover.
|
(minus)
|
amount paid by the employee for the furniture
|
c) Perquisite Valuation In Respect of Interest Free Or Concessional Loans
It is common practice, particularly
in financial institutions, to provide interest free or concessional loans to employees or any member of his household.
The value of perquisite arising from such loans
would be the excess of interest
payable at
prescribed interest rate over interest, if any, actually paid by the employee or any member of his household. The prescribed interest rate would now be the rate charged per annum by the State Bank of India as
on
the 1st day of the relevant financial year in respect of loans of same type and for the same purpose advanced by it to the general public. Perquisite value would be calculated on the basis of the maximum outstanding monthly balance method. For valuing perquisites under this rule. any
other method of calculation and adjustment otherwise adopted by the employer shall not be relevant. However, small loans up to 20,000/- in the aggregate are exempt. SBI rate for the
F.Y. 2017-2018 are as under:-
|
Type of Loan
|
Rate of Interest
|
|
|
I Female
|
Male
|
|
|
Housing Loan
|
8.60%
|
8.65%
|
|
Vehicle Loan
|
9.20%
|
9.25%
|
|
Over Draft
Loan
|
12.65%
|
|
Loans for medical
treatment of diseases
specified in
Rule
3A are
also exempt, provided the amount of loan for medical reimbursement is not reimbursed under any medical insurance scheme. Where any medical insurance reimbursement is received, the perquisite value at the prescribed rate shall
be charged from the date of
reimbursement on the amount reimbursed, but not repaid against the outstanding loan taken specifically for this purpose.
d) Perquisite value of motor car I vehicle
(1)
If an employer provides motor car facility to his employee , the value
of such perquisite shall be :
a)
Nil, if the motor car is used by the employee wholly and exclusively in the performance of his official duties.
b)
Actual expenditure incurred by the employer
on the running and maintenance of motor car including
remuneration to chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by any amount charged from the employee for such
use (in case the motor car is exclusively for private or personal
purposes of the employee or any member of his household).
c)
1800/- (plus 900/-, if chauffeur is also provided) per month (in case the motor car is used partly in performance of duties and partly for private or personal purposes
of the employee or any member of his
household
if the
expenses on maintenance and running of motor car are met or
reimbursed by the employer) . However,
the value of perquisite will be 2400/-(plus 900/-, if chauffeur is also provided) per month if
the cubic capacity
of
1800/- (plus 900/-, if chauffeur is also provided) per month (in case the motor car is used partly in performance of duties and partly for private or personal purposes
of the employee or any member of his
household
if the
expenses on maintenance and running of motor car are met or
reimbursed by the employer) . However,
the value of perquisite will be 2400/-(plus 900/-, if chauffeur is also provided) per month if
the cubic capacity
of
engine of the motor car exceeds 1.6 litres.
d)
6001- (plus 900/-, if chauffeur is also provided) per month (In case the motor car is used partly in performance of duties and partly for private or personal purposes of the employee
or
any
member of his household if the expenses on maintenance and running of motor car for such private or personal use are fully met by the employee). However , the value of perquisite will be 900/-
(plus 900/-, if chauffeur is
also provided) per month if the cubic capacity of engine of the motor car exceeds 1.6 litres
\rr--- Page 9 of 12
(2)
If the motor car or any other
automotive conveyance is owned by the employee but the actual running
and maintenance charges are met or reimbursed by the employer , the method of valuation of perquisite
value is different
and as below:
If the motor car or any other
automotive conveyance is owned by the employee but the actual running
and maintenance charges are met or reimbursed by the employer , the method of valuation of perquisite
value is different
and as below:
a) where the motor car or any other automotive conveyance is owned by the employee but actual maintenance & running
expenses (including chauffeur salary, if any) are met or reimbursed by the employer, no perquisite shall be chargeable
to tax if the car is used wholly
and exclusively for officia l purposes. However following compliances are necessary :-
i.
The employer has maintained complete details of the journey undertaken for official purposes such as date of journey , destination mileage and amount of expenditure incurred thereon.
ii.
The employer gives a certificate that the expenditure was incurred wholly for official duties.
However if the motor car is used partly for official or partly for private purposes then the amount of perquisite shall be the actual expenditure incurred by the employer as reduced by the amounts
in c) referred to in (1) above.
Normal wear and tear of the motor
shall be taken at 10 % per annum of the actual cost of the motor car.
An employee can claim higher
amount is attributable for official purpose, the value of perquisite in such a case shall be the actual amount of charges met or reimbursed by the employer as reduced by such higher amount provided
the
condition mentioned in 2(a) shall be fulfilled
.
e) Personal attendants etc.:
The value of free service of all personal attendants including a sweeper . gardener and a watchman
is to be taken
at actual cost to the employer. Where the attendant
is
provided at the residence of the employee , full cost will be taxed as perquisite in the hands of the
employee irrespective of the degree of personal service rendered to him. Any amount paid by the employee for such facilities or services shall be reduced from the above amount.
f) Gas, e lectricity & water for household consump ti o n:-
The value of perquisite in the nature of gas, electricity and water shall be the amount paid by the employer . Any amount paid by the employee
for such facilities or services shall be reduced from the perquisite value.
g) Free or co ncessiona l educat ion:-
Perquisite
on
account
of
free
or
concessional education for any member
of the employee's household
shall
be
determined
as
the
sum
equal to the amount
of expenditure incurred by the employer in that behalf.
However , where such educational institution
itself is maintained and owned
by the employer or where such free educational facilities are provided in any institution by reason of his being in employment of that employer , the value of the perquisite to the employee shall be determined with reference to the cost of such education in a similar institution in or
Page 10 of 12
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