Smiling faces were seen when Finance Minister Arun Jaitley tabled his maiden Budget in Parliament on 10 July. Indeed, the Budget lived up to the BJP’s promise of ushering in ‘achche din’. The basic exemption limit for ordinary taxpayers has been raised from Rs 2 lakh to Rs 2.5 lakh. For senior citizens above 60 years, the limit has been increased from Rs 2.5 lakh to Rs 3 lakh. There is no change in the Rs 5 lakh tax exemption for very senior citizens above 80 years old. Â
Those in the lowest tax bracket still have something to smile about. The budget has not removed the Rs 2,000 tax relief given in Budget 2013 to those earning below Rs 5 lakh a year. This means that individuals earning up to Rs 4.2 lakh a year and investing Rs 1.5 lakh under Section 80C will go out of the tax net.
Senior citizens have always had a special place in Indian society. This aspect has been acknowledged and respected even by the Indian tax laws, which attempt to cushion our elders by easing the tax paying and compliance process for them through certain benefits and deductions.
DETAILED LOOK AT THE TAX SLABS FOR ASSESSMENT YEAR 2015-16Â
- Tax Slab for an Individual (resident & below 60 years) or HUF/AOP/BOI/AJP
Income Slabs | Tax Rates |
Total income up to Rs. 2.5 Lac | 0% Tax |
Total income above Rs. 2.5 Lac and below Rs.5 Lac | 10% on amount exceeding Rs. 2.5 Lac |
Total income above Rs. 5 Lac and below Rs.10 Lac | 20% on Income exceeding Rs. 5 Lac + Rs. 25,000 |
Total income more than Rs. 10 Lac | 30% on Income exceeding Rs. 10 Lac + Rs. 1,25,000 |
- Tax Slab for an Individual ( 60 years & above but below 80 years)
Income Slabs | Tax Rates |
Total income up to Rs. 3.00 Lac | 0% Tax |
Total income above Rs. 3.00 Lac and below Rs.5 Lac | 10% on amount exceeding Rs. 3.00 Lac |
Total income above Rs. 5 Lac and below Rs.10 Lac | 20% on Income exceeding Rs. 5 Lac + Rs. 20,000 |
Total income more than Rs. 10 Lac | 30% on Income exceeding Rs. 10 Lac + Rs. 1,20,000 |
3. Tax Slab for an Individual (80years & above)
Income Slabs | Tax Rates |
Total income up to Rs. 5 Lac | 0% Tax |
Total income above Rs. 5 Lac and below Rs.10 Lac | 20% on Income exceeding Rs. 5 Lac |
Total income more than Rs. 10 Lac | 30% on Income exceeding Rs. 10 Lac + Rs. 1 Lac |
For all the above cases:
- The amount of Income-tax shall be increased by Education Cess of 3% on Income-tax.
- If the Taxable Income exceeds Rs. 1 crore, Surcharge @ 10% of Income tax is applicable.
So whereas the income in the hands of individual remains the same but the taxes paid by them will be minimized in a good extent. Surely, with this increase in the basic exemption limit there will be an increase in our income yet in disguise.
The more we save, the more we can spend and surely it is an increase in our income!!
Also, if you require our assistance in the filing of Income Tax return filing, please check here .
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