Budget 2017-18: Income
Tax benefit illustrations for all Slabs..
The union government has proposed to decrease the income tax
for those earning between Rs. 2.5 Lakh to Rs. 5 Lakh per annum to 5% from 10%.
This is a welcome move & would benefit all tax slabs.
Here is illustrations
1. For
those in (old) 10% and new 5% tax slab
Net taxable income after considering all applicable
deductions = Rs. 4 Lakh.
OLD
SLAB: FY 2016-17
Total Tax before cess =
10% of income above Rs. 2.5 Lakh = 10% of Rs. 1.5 Lakh = Rs.15,000
Section 87A can be applied for further deduction.
Rs. 15,000 – 5,000 = Rs. 10,000.
New
SLAB
Total Tax before cess = 5% of income above Rs. 2.5 Lakh =
5% of Rs. 1.5 Lakh = Rs.7,500
A total saving (before cess) of Rs. 7,500 (but 50%)
Section 87A can be applied for further deduction.
Budget 2017-18 offers a rebate of Rs. 2,500 , Section 87 A from total tax payable before cess for
those with a taxable income of Rs. 3.5 Lakh.
Here taxable income of Rs. 4 Lakh, so rebate of Rs. 2,500
not applicable
2. For those in 20% tax slab
Net taxable income after considering all applicable
deductions (80c, 80D etc..) = Rs.7 Lakh.
OLD
SLAB FY 2016-17
Total Tax before cess = Rs.25,000
(10% slab) + Rs.40,000 (20% slab) = Rs. 65,000
That is 10% of Rs. 2.5 Lakh + 20% of amount above Rs. 5 Lakh
= Rs.65,000
New
SLAB
Total Tax before cess = Rs.12,000 (5% slab) + Rs.40,000
(20% slab) = Rs.52,500
That is 5% of Rs. 2.5 Lakh + 20% of amount above Rs. 5 Lakh
= Rs.52,500
A total
saving (before cess) of Rs. 12,500
3. For those in 30% tax slab
Net taxable income after considering all applicable
deductions = Rs.15 Lakh.
OLD
SLAB FY 2016-17
Total Tax before cess = Rs.25,000
(10% slab) + Rs.1,00,000 (20% slab) + Rs.1,50,000 (30% slab) = Rs. 2,75,000
That is 10% of Rs.2.5 Lakh+ 20% of Rs. 5 Lakh + 30% of
(amout above 10L) = Rs. 2.75 Lakh
New
SLAB
Total Tax before cess = Rs. 12,500 (5% slab) + Rs.1,00,000
(20% slab) + Rs.1,50,000 (30% slab) = Rs.2,62,500
That is 5% of Rs. 2.5 Lakh + 20% of Rs. 5 Lakh + 30% of
(amount above 10L) = Rs. 2,62,500
A total
saving (before cess) of Rs. 12,500
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