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LatestIncomeTaxSlabsandRatesforFY201617andAY201718
by
AllBankingSolutions.comTeam
AdsbyGoogle ThefollowingINCOMETAXRATESAREapplicablefortheFinancialYearendingMarch31,
FinancialYear201617)AssessmentYear201718)
Everyyeartheincometaxratesarechangedanditisimportanttogetthelatestincometaxrates.Wegiveb
theIncomeTaxRatesandSlabsapplicablefortheFY201617orAY201718.[Astherewasno
IncomeTaxslabsforFY201617(i.e.AY201718),thefollowingrateswerealsoapplicableforF
16(AY201617)&FY201415(AY201516)
Thus,wecansay:
1.Thebasicexemptionlimitforindividuals(i.e.below60yearsofage)isRs2.50lakhs
2.ThebasicexemptionlimitforSeniorcitizens(60yearstobelow80years)is:Rs3.00lakhs
3.ThebasicexemptionlimitforVerySeniorCitizens(80yearsandabove)isRs3.50lakhs
*AtaxrebateofRs.5000fromtaxcalculatedwillbeavailableforpeoplehavinganannualincomeuptoRs5lakh(forFY201516,thetaxrebateinthiscategoryused
2000).However,thisbenefitofRs.5000taxcreditwillnotbeavailableifyoucrosstheincomerangeofRs5lakh.Thuswecansaythattaxpayablein10%slabwillbe
Rs20,000(takingintoaccountRs5000taxcredit),butforpeoplewhofallinincomerangeofRs5lakhandabove,thetaxwillbeRs25,000+20%taxonincomeabove
Duetothisprovision,thosewhoearnbelowRs.3lakhsarenotrequiredtopayanytax.
**Theeducationcesstocontinueat3percent.
***TheSurcharge@15%fortheFY201617orAS201718willbepayableiftheincomeisaboveRs1crores).FortheFY201516itwas12%.
However,sometaxreliefhasbeengiveninFY201617throughthefollowingrebates:
Asmentionedabove,theincometaxrebateisincreasedtoRs5000fortaxableincomebelowRs.5lakhs
Thetaxdeductionforrentpayment(section80GG)isincreasedfromRs.24000toRs.60000.Thisdeductionisavailabletothose,wholiveinrentedhouse,andd
getHouseRentAllowancefromtheiremployer.
FirsttimehomebuyerscanclaimanadditionalTaxdeductionofuptoRs.50,000onhomeloaninterestpaymentundersection80EE.ThisextradeductionofRs
wouldbeavailableover&abovethe80ClimitofRs.1.5lakhs.ItmeansthattotaltaxdeductionunderSection80CcangouptoRs.2lakhsprovidedatleastRs5
paidashomeloaninterestwithinthefinancialyear.Thisextrataxdeductionisavailabletoonlythosehomebuyers,whomeetALLthefollowingcriteria(i)wh
homeloansanctionedinFY201617(ii)whoseloanamountislessthan35lakhs(iii)valueofhouseshouldnotbemorethanRs.50lakhs
TherewouldbenocapitalgainstaxonredemptionoftheSovereignGoldBond.ThelongtermcapitalgainsarisingfromtransferofGoldBondwouldbeeligible
Indexationbenefit.TheSovereignGoldbondschemeislaunchedtodiscouragethepurchaseofphysicalgoldfortheinvestmentpurpose.
Thegovernmentwouldnotchargeanycapitalgainstaxontheinterestincomeofgoldmonetizationscheme.Thegoldmonetizationschemewaslaunchedtochan
idlehouseholdgold
The40%withdrawalofNPS(NationalPensionSystem)wouldbeexemptedfromthetax.AlongwiththistheNPS,wealthgivetothenomineeafterthedeathof
subscriberwouldbe100%exemptfromthetax.
Ifanemployerinvestsintothepensionfundofanemployee,theinvestedamountisexemptfromtax.Thisyear'sbudget(2016)hasincreasedtheexemptionlimi
lakhtoRs.1.5lakh.
OtherImportantLinks:
DownloadFREEMajorITRFormsforFinancialYear201415ITR1,ITR2,ITR2A,ITR4Spdffiles,FillablefilesAND
Instructions
HOWTOMAKEBESTUSEOFSECTION80CORSavingTaxByInvestingUnderSection80C
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HowtoAvoidTDSDeductionbyBanksHOTTIPSFORTDSinBanks
SOMEVERYPOPULARSCHEMESFORINVESTMENTS(INCLUDINGFORTAXSAVINGS)
DownloadPDFfilesforForm15G,Form15H,Form60,Form61
MajorChangesinBudgetforFY201617
Changesasper Changesasper
Provisionsfor
BudgetforFY BudgetforFY2016
FY201415
201516 17
Particulars
OR
OR OR
AY201516
AY201617 AY201718
ComparisonofBenefitsundervariousITSections
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1/20/2017 LatestIncomeTaxSlabsandRatesforFY201617andAY201718
In case any employer
In case any employer
contributes to the NPS
contributes to the NPS
scheme on behalf of the
schemeonbehalfofthe
employee and the benefit
employee and the
of the same would be
benefit of the same
availed by the employee,
wouldbeavailedbythe
the employee would also
employee, the
be allowed a deduction
employeewouldalsobe
under Section 80CCD(2)
allowed a deduction
for the amount of
under Section
contribution made by the
80CCD(2) for the
employer.
amount of contribution
madebytheemployer.
WealthTaxHasbeenAbolishedintheBudgetfor201516
Changesthatwereeffectedfromearlieryears,i.e.,theFY201415(AY201516)
Investmentlimitundersection80CoftheIncomeTaxActraisedfromRs.1lakhtoRs.1.5lakh.
DeductionlimitonaccountofinterestonloaninrespectofselfoccupiedhousepropertyraisedfromRs.1.5lakhtoRs.2lakh.
PersonalIncometaxexemptionlimitraisedbyRs50,000/thatis,fromRs.2lakhtoRs.2.5lakhinthecaseofindividualtaxpayers,belowtheage
years.
[ClickHeretoseetheIncomeTaxSlabRatesforFY201516orA
[ClickHeretoseetheIncomeTaxSlabRatesforFY201314orA
[ClickHeretoseetheIncomeTaxSlabRatesforFY201213orA
ImportantRulesforfilingofTaxReturn
1.Filingofincometaxiscompulsoryforallindividualswhosegrossannualincomeexceedsthemaximumamountwhichis
notchargeabletoincometax(e.g.Rs.3,00,000forSeniorcitizens,Rs.2,50,000/forresidentindividuals)
2.ThelastdateforfilingofincometaxreturnisusuallyJuly31forindividuals(sometimesthesameisextended).
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3.Consequencesfornonfilingincometaxreturn:(i)Youwillbeissuednoticeu/s142(1)fornonfilingofincometaxreturnif
theincometaxdept.(ii)Lossesifanyduringtheyear,wouldnotbeallowedtocarryforward.Normally,ifyoufileyourreturn
ontimelossesofthisyearcanbesetoffagainstgainofforthcomingyears.(iii)APenaltyofRs.5,000/maybeimposed
undersection271Fifbelatedreturnissubmitted.(iv)Interestu/s234Aattherateof1%permonth/partofthemonthwould
becharged.
(1)DeductionsfromTaxableIncome(Section80C):
VARIOUSINVESTMENTSOPTIONSAVAILABLETOINDIVIDUALSANDTAXBENEFITS
AVAILABLEUNDEREACHOFTHEMFinancialYear201617
Anewsection80Cwasintroduced(replacingsection88)fromthefinancialyear200506.UnderthisSection,adeduction
ofuptoRs.1,50,000/(wefFY201415)isallowedfromTaxableIncomeinrespectoftheinvestmentsmadeinsome
specifiedschemes.TheschemesaresimilaraswereavailableinSection88earlier.Nowtherearenosectoralcapsand
individualscansaveinanyoftheschemesuptoRs.1,50,000/(noweveninPPFitisalloweduptoRs.1.50lacasagainstonly
Rs.1lakhuptoMarch2014)..Thetaxpayerscanplantheirinvestments/savingssoastoachievetheirfinancialgoals.The
detailsofsuchschemesalongwithsomemajorfeaturesofeachofthesearegivenbelow:
(lastreviewedinApril,2016)
PSNote:Nowsomeoftheaboveinvestments(likePPFand5YearSeniorCitizensSavingSchemesetc.)arelinkedtothebenchmarkof10year/5Yeargovernmentbondy
thusthereturnontheseinvestmentswillvaryasandwhentheyieldongovernmentbondschanges.Therefore,nowrememberthatyouwillnothavefixedrateofreturnonthe
investments.Ontheotherhand,forotherSmallSavingschemesGoIwilladvisebefore1stAprileveryyear,theratesapplicableforthoseschemesforthenextFY.Suchinstru
continuetohavesamereturnforthewholetenureoftheinvestment.[Forclarificationseebelowthenotificationwhichisselfexplanatory]
DeductionsAllowedInSectionsBeyond80C:
(1)DeductionsUnderSection80CCC(1):
Underthissection,thecontributionsbyindividualstowards"Pension"schemesofLICoranyotherInsurancecompany,isallowedasdeductionofRs.10,000/.However,aspro
section80CCE,theaggregatedeductionu/s80C,andu/s80CCCand80CCDcannotexceedRs.1,50,000/.Thuseffectively,nowthesearecoveredunderthemaximumlim
Rs.1,50,000/undersection80C.
(2)DeductionsUnderSection80D:
BasicDeductionunderSection80D,MediclaimpremiumpaidforSelf,SpouseordependantchildrenhasnowbeenraisedtoRs25,000wefFY201516.
ThedeductionforseniorcitizensisraisedfromRs20,000toRs30,000.Foruninsuredsuperseniorcitizens(morethan80yearsold)medicalexpenditureincurredupt
shallbeallowedasadeductionundersection80D.However,totaldeductionforhealthinsurancepremiumandmedicalexpensesforparentsshallbelimitedtoRs30,000
However,thereareafewconditions:
Youcannotclaimtaxbenefitonhealthinsurancepremiumpaidforyourinlaws
Proofofpaymentofpremiumhastobefurnished,inordertoavailthetaxbenefit
Thehealthinsurancepremiummustbepaidfromtaxableincomeofthatyearonlyifyouwanttoclaimadeduction.Thus,ifonehaspaidthepremiumfromon
orfromgiftsofmoneyreceived,thenoneisnoteligiblefortaxbenefitsunderthissection.
However,youhavetorememberthatthepremiumpaidbyanymodeofotherthancashiseligible.Notepriorto1stApril2009,premiumpaymentwasrequiredtob
bycheque.However,noweventhepaymentsthroughCreditcardorotheronlinemechanismareallowed.Thus,nowallpaymentmodesexceptcashpaymentareac
(3)DeductionsUnderSection80E:
Underthissection,deductionisavailableforpaymentofinterestonaloantakenforhighereducationfromanyfinancialinstitutionoranapprovedcharitableinstitution.Theloansho
foreitherpursuingafulltimegraduateorpostgraduatecourseinengineering,medicineormanagement,orapostgraduatecourseinappliedscienceorpurescience.
LoanshouldhavebeentakenforthepurposeofpursuinghigherstudiesofIndividual,Spouse,ChildrenofIndividualorofthestudentofwhomindividualislegalGu
Educationloantakenforsiblings(brother/sister)orotherrelatives(inlaws,nephew,niece,etc.)wouldnotqualifyforsection80Ebenefit.
The amount of interest paid is eligible for deduction and moreoverthere is no cap on the amountto be deducted. You can deduct the entire interest a
from your taxable income. However there is no benefit available on the repayment of principal amountof the loan. Deduction shall be allowed in co
the total income in respect of the initial assessment year* and seven assessment years immediately succeeding the initial assessment year or until the
paid by the assessee in full, whichever is earlier. The tax benefits on education loan are only valid once you start the repayment and moreover they a
available up to eight years. For instance if your loan tenure exceeds eight years, you cannot claim for deductions beyond eight years.
(4)DeductionsUnderSection24(b):
Underthissection,interestonborrowedcapitalforthepurposeofhousepurchaseorconstructionisdeductiblefromtaxableincomeuptoRs.2,00,000/isdeductiblefromincom
conditionsaretobefulfilled)
Wehaveseenthattheprincipalamountintherepaymentofahomeloancanbeaddedtothe80ClimitofRs1.5lakhfortaxsavings.However,theinterestcomponentofhome
allowedasdeductionunderSection24BforuptoRs2lakhincaseofaselfoccupiedhouse.Incasethehouseisinthejointnameofyourspouseandyou(jointloan),eachone
Rs2lakhinterestcomponentdeduction.Thislimitisonlyforselfoccupiedhouse.Ifyouhavepropertywhichisrentedout,youcandeductthefullinterestpaidonthehomelo
onthepropertydoesbecomepartofyourincome.Iftherentislesserthantheloaninterest,itwillloweryouroveralltaxliability.
PS:1A)Section80CCF:InfrastructureBonds:(NOTPERMITTEDFROMFY201213)onwards):
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Section80CCFallowedyoutoinvestanadditionalRs.20,000ininfrastructurebonds,andsuchaninvestmentwasreducedfromyourtaxableincomeinadditiontoth
Rs.100,000deductionyougetfromtheotherinstrumentslistedabove.Youweretogetthetaxbenefitonlyintheyearinwhichyouhaveinvestedintheseinstruments
THISISNOTALLOWED.
TAXFREEINCOMES:
Someoftheincomesarecompletelyexemptedfromincometaxandthattoowithoutanyupperlimit.Thefollowingincomeswhicharetaxfree:
(a)InterestonEPF/GPF/PPF
(b)InterestonGOITaxFreeBonds/TaxFreeBondsissuedwithspecificstipulationtothiseffect
(c)DividendsonSharesandMutualFunds.Dividendincomefromcompanies/EquityOrientedMutualfundsiscompletelyexemptinthehandsofinvestors.Dividen
taxfreeinthehandsofinvestorsincaseofdebtorientedMutualFundschemes.(However,theAssetManagementCompanyisliabletodeduct22.44%distributionta
nonindividuals/nonHUFinvestorsand14.025%incaseofindividualsorHUFinvestors.)
(d)CapitalreceiptsfromLifeInsurancepoliciesi.e.sumsreceivedeitherondeathoftheinsuredoronmaturityofLifeinsuranceplans.However,incaseoflifeinsura
policiesissuedafterMarch31,2004,exemptiononmaturitypaymentu/s10(10D)isavailableonlyifpremiumpaidinanyyeardoesnotexceed20%ofthesumasssure
e)InterestonSavingBankaccountsinbanksuptoRs10,000/peryear(fromFY201213onwards)
(f)Longtermcapialgainsonsaleofsharesandequitymutualfundsafter01/10/2004,ifsecuritytransactionispaid/imposedonsuchtransactions.
GIFTTAX:
GifttaxwasabolishedwitheffectfromOctober1,1998.Thegiftsarenolongertaxableinthehandsofdonorordonee.However,w.e.f.September1,2004,anygiftr
anindividualorHUFwillbeincludedintaxableincome,iftheamountoftaxexceedsRs.25,000/.However,giftsreceivedfromanyofthefollowingwillcontinuetor
free:
(i)Spouse
(ii)Brotherorsister
(iii)Brotherorsisterofthespouse
(iv)Brotherorsisterofeitheroftheparentsoftheindividual
(v)Anylinealascendantordescendantoftheindividual
(vi)Anylinealascendantordescendantofthespouseoftheindividual
(vii)spouseofthepersonreferredtoin(2)or(6)orreceivedontheoccasionofmarriageorunderawillbywayofinheritance
CapitalGains:
CapitalgainsarisewhenanindividualsellsataprofitcertainassetslikepropertyorsharesormutualfundsorbondsetcThetreatmentofsuchincomeisnotthesam
incomefromothersources.Therearetwotypesofcapitalgains,vizShortTermCapitalGainsorLongTermCapitalGains.
(a)ShortTermCapitalGains:CapitalgainisconsideredasShortTermCapitalGain,ifimmovablepropertyissold/transferredwithinthreeyearsofacquiringthesame.Sim
sharesorotherfinancialsecuritiessuchasmutualfundsaresoldwithinoneyearofpurchase,theprofitearnedistreatedasShortTermCapitalGain.
Shorttermcapitalgainisincludedinthegrosstaxableincomeandnormaltaxratesareapplicable.However,w.e.f.1stOctober,2004,theshorttermcapitalgainsfromsaleof
sharesorunitsofequityorientedmutualfundschemesaretaxedonlyataflatrateof10%,irrespectiveofthetaxslabonothersourcesofincome,providedsecuritiestransactio
paidonsuchsale.
(b)LongTermCapitalGains:CapitalgainisconsideredastheLongTerm,iftheimmovablepropertyissoldafterthreeyearsfrompurchse,orfinancialsecurtiessuchasshare
discountbonds,unitsofopenendedorcloseendedschemesofmutaulafundsaredisposed(i.e.sold/redeemed/transferred)afterholdingthesameformorethantwelvemont
thegainisconsideredtobelongtermcapitalgain.
Longtermcapitalgainsontransferoflistedshares/unitsofequityorientedmutualfundsschemeshasbeenexemptedfromtaxw.e.f.1stOctober,2004,providedsecuritiestran
taxhasbeenpaidonsuchsale.Forassetsotherthanthelistedshares/unitsofmutualfundsschemes,taxispayableinrespectoflongtermcapitalgainsataflatrateof20%an
amountofgainhastobeadjustedforinflationthroughindexationbenefit.
Longtermcapitalgainstaxinrespectofbondsanddebtsecuritiesordebtorientedmutualfundschemeslistedonstockexchangesispayableataflatrateof10%ofthecapital
amount.Incaseanindividualwishestoavailthebenefitsofindexation,thentaxhastobepaidatnormallongtermcapitalgainstaxrateof20%.
Section54ECoftheITAct,1961:RelieffromCapitalGainsTax
YoucanmakegooduseofthisSectiontosaveTaxesspeciallywhenyousellsomeproperty.TheIncomeTaxlawsprovidesfortaxesonlongtermcapitalgainsat20perce
for individuals and foreign firms and 30 per cent for domestic companies. However, Section 54EC of the IT Act, 1961, provides relief from capital gains tax. Under th
Section, gains on transfer of a longterm capital asset can be exempted from tax if the money is invested in bonds of specified institutions such as NABARD, the Ru
ElectrificationCorporation(REC),SIDBIortheNationalHighwayAuthorityofIndia.Suchbondsareredeemableafterthreeyears.However,tosavetax,youhavetoinve
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inthesebondswithinsixmonthsfromthedateoftransferoftheoriginalasset.Thusinvestinginthesebondswilleffectivelymeanthatyourmoneyislockedinforthreeyears.
youwanttobuyanewpropertyoneortwoyearsaftertransferringtheoriginalasset,youwillhavetoeitherwaitorlookforalternativefunds.Afterthelockinperiodoront
maturityofthebonds,theinvestorisfreetoputinhismoneyinanykindofasset.However,theinterestonthebondistaxable.
Ontheotherhand,StateBankofIndia,offersSBICapgainsPlusSchemewherelockinperiodisabsent,aslightlyhigherinterestratecomparedtothecapitalgaintaxsavi
bondsisoffered.TheproceedsofthesaleofthecapitalassetcanbeparkedinthefixeddepositschemeundertheCapgainsPlusplanataninterestratemarginallyhigherth
whatbondsunderSection54ECwouldfetch.Theinterestearnedwillbetaxedatprevailingrates.However,unlikethebondsunder54EC,thedepositorcannotputthemon
inadifferentkindofasset.Theplanstipulatesthatreinvestmentshouldbemadeonthespecifiedassetonly.Therefore,thisschemeisaboonforpeoplewhohavesoldth
propertybuthaven'tbeenabletopurchasethepropertywithinthestipulatedperiod.Onceafinaldecisionistakenonthepropertyyouwanttoreinvestin,youcanoptfor
exitfromSBIPlan,butyouwillneedtogetacertificateofconsentfromtheassessmentofficer.
ClickHeretoViewPreviousYears(Last10years)IncomeTaxSlab/RatesinIndia
*******
LatestCircularsRegardingRateofInterestonSmallSavingsetc.
RBICIRCULARFORRATEOFINTERESTONPPFandSCSS2004Schemes
RBI/201415/536
IDMD(DGBA).CDD.No.4521/15.02.001/201415
April01,2015
Madam/DearSir,
RevisionofinterestratesforSmallSavingsSchemes
PleaserefertoourcircularRBI/201112/359datedJanuary20,2012regardinginterestratesonsmallsavingsschemes,whereinitwasindicatedthatasperGovernmentsdecisionon
interestonsmallsavingsschemes,theinterestratesonvarioussmallsavingsschemesforeveryfinancialyearwillbenotifiedbytheGovernmentbeforeApril01stofthaty
2.TheGovernmentofIndiahavevidetheirOfficeMemorandum(OM)No.6/01/2011NS.IIdatedMarch31,2015,advisedtherateofinterestonvarioussmallsavingsschemesforthef
201516.Accordingly,theratesofinterestonPPF1968,SCSS2004,KisanVikasPatra&SukanyaSamriddhiAccountSchemeforthefinancialyear201516,effectivefromApril01,2
basisoftheinterestcompounding/paymentbuiltinintheschemes,willbeasunder:
Rateof
Scheme
RateofInterestw.e.f.01.04.2014(Old RateofInterestw.e.f. Interest
rates) 01.04.2015 w.e.f.
01.04.2016
5yearSCSS,2004 9.20%p.a 9.30%p.a 8.60%p.a
PPF,1968 8.70%p.a 8.70%p.a 8.10%p.a
KisanVikasPatra 8.70%p.a 8.70%p.a 7.80%p.a
SukanyaSamriddhiAccountScheme 9.10%p.a 9.20%p.a 8.60%p.a
3.ThecontentsofthiscircularmaybebroughttothenoticeofthebranchesofyourbankoperatingthePPF1968,SCSS2004,KisanVikasPatra&SukanyaSamriddhiAccountSch
shouldalsobedisplayedonthenoticeboardsofyourbranchesforinformationofthesubscriberstotheseSchemes.
Yoursfaithfully
(ShrikantHamine)
Manager
RevisionofInterestRatesforSmallSavingsSchemesfortheFinancialYear201617Announced
VariousdecisionstakenbytheGovernmentofIndiaontherecommendationsoftheShyamalaGopinathCommitteeforComprehensiveReviewofNationalSm
Fund(NSSF),werecommunicatedtoallconcernedbytheGovernmentthroughitsOfficeMemorandumdated11thNovember,2011.
OneofthedecisionsoftheGovernmentbasedontherecommendationsoftheCommitteerelatestorevisionofinterestrateseveryfinancialyear,tobenot
1stAprilofthatyear.AccordinglywiththeapprovaloftheFinanceMinister,theratesofinterestonvarioussmallsavingsschemesfortheFinancialYear201617eff
01.04.2016,onthebasisoftheinterestcompounding/paymentbuiltinintheschemes,shallbeasunder:
Scheme OldRateofinterest Old Rate of RateofInterest
w.e.f.01.04.2014 Interest w.e.f.01.04.2016
w.e.f.01.04.2015
1. 2. 3. 4.
SavingsDeposit 4.0 4.00 4.00
1YearTimeDeposit 8.4 8.40 7.10
2YearTimeDeposit 8.4 8.40 7.20
3YearTimeDeposit 8.4 8.40 7.40
5YearTimeDeposit 8.4 8.50 7.90
5YearRecurring 8.40 8.40 7.40
Deposit
5YearSCSS 9.20 9.30 8.60
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9.30 8.60
5YearMIS 8.40 8.40 7.80
5YearNSC 8.50 8.50 8.10
10YearNSC 8.80 8.80 DISCONTINUED
PPF 8.70 8.70 8.10
Sukanya Samriddhi 9.10 9.20 8.60
AccountScheme
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