The Union budget presented by Mr. Arun Jaitley today has provided a big help for low income earners. He has also acknowledged the salaried employees expectation by saying there’s a legitimate demand for lower tax burden.

In this content we will focus on steps taken by the government for Individuals basically salaried and lower income individuals.

     Income Tax Slab-The biggest move of today’s budget for lower income individuals was the change in Income tax rate for individuals earning income between Rs 2,50,000-Rs 5,00,000. The tax rate for this slab is being reduced to 5% from 10%. This change reduces the tax liability either to 0 or 50% of the net tax liability. The subsequent slab remains unchanged.

                         Income tax Slab for FY 2017-18

                 up to Rs 2,50,000                                                                            Nil
                Rs 2,50,000 -Rs 5,00,000                                                              5%
                Rs 5,00,000- Rs 10,00,000                                                            20%                   

Above Rs 10, 00,000                                                                        30%

            Rebate u/s 87A– The amount of rebate u/s 87A for FY 2017-18 is allowed up to Rs 2500 or 100% of the tax payment . This is applicable for an individual being a resident individual whose total income does not exceed Rs 3, 50,000.

        Surcharge– From FY 2017-18 the amount of tax to be deducted in case of a person having total income above Rs 50lakhs but less than Rs 1 Crore shall be increased by 10% .

      Income Tax Return– Individuals always find it difficult to file the return because of the Complexity of ITR form. From FY 2017-18 individuals having taxable income up to Rs 5, 00,000 will have to file a simple 1 page ITR form. In addition to this time period for revising the ITR is reduced to twelve months from the end of financial year.

A new section 234F has also been inserted in budget 2017. Any person who is required to file return u/s 139 fails to do so with the prescribed time shall be liable for penalty. The amount of penalty shall be Rs 5000 if the return is furnished on or before the 31st day of December of the
assessment year and Rs 10000 for further delay. However if the total income of the person does not exceed Rs 5 lakh the amount of penalty shall not exceed Rs 1000.

Government has presented a data according to which 3.7 cr individuals have filed their returns in 2015-16. Out of this only 24 lakh persons showed income above Rs 10 lakh. 52 lakh individuals have showed income between Rs 5-10 lakhs.  The focus of government with this budget is to move from a tax non compliant economy  to a tax compliant economy.