Income Tax Calculation under 2017 Budget for the FY 2017-18 / AY 2018-19

Much awaited national budget for the Financial Year 2017-18 was introduced by the Union Finance Minister Mr. Arun Jaitley on February 1, 2017. The Budget 2017 has come up with lots of economic relief to the Aam Admi (common man). One of the major highlight of the Budget 2017 is the restructuring of tax structure so as to benefit the Aam Admi, which was indeed a great relief to the common man especially after the Demonetization of November 8, 2016.

Let’s have a look on the Tax Calculation under Budget, 2017. The good news for middle income group or the salaried class (Taxable Income up to Rs. 5 Lacs) is reduction of Tax slab from 10% to 5%.

Income Slab	Tax Rate
Up to 3 Lacs	Nil
3 Lacs – 5 Lacs	5%
5 Lacs – 10 Lacs	20%
10 Lacs – 50 Lacs	30%
50 Lacs – 1 Crore	30% + 10% surcharge
Above 1 Crore	30% + 15% surcharge

Tax Rebate of Rs. 2500 will be available for those whose Taxable Income falls within 2.5 Lacs – 5 Lacs. However, such Tax Rebate is not applicable if your Taxable Income is above 5 Lacs.

Budget further reduced the long term capital gains of tax on property from 3 years to 2 years.

Calculate your Income Tax for the FY 2016-17 / AY 2017-18

Calculation of Income Tax is always a head ache for salary class people. Since, most of them does their filing themselves, they always looks for the proper guidance. Thus, we thought of coming up with this Article on How to Calculate your Income Tax for the FY 2016-17 / AY 2017-18.

Income Slab	Individuals below 60 Years	Individuals b/w 60 – 80 Years	Individuals above 80 Years
Up to 2.50 Lacs	Nil	---	---
Up to 3.00 Lacs	---	Nil	Nil
2.50 – 5.00 Lacs	10%	---	Nil
3.00 – 5.00 Lacs	---	10%	Nil
5.00 – 10.00 Lacs	20%	20%	20%
10.00 Lacs & above	30%	30%	30%

Education cess will apply 3% on the Income tax & Surcharge will apply for all, and Surcharge of 15% on Income tax those taxable income exceeds Rs.1.00 Crore will apply.

Section 80C gives deduction for various savings schemes up to Rs. 1.50 lakhs and additional deduction of Rs.50,000 towards investment in National Pension Scheme (NPS) under 80CCD (1b).

Additional tax deduction of Rs.50,000/- allowed on the new housing loans taken after April 1, 2016.

Use this Income Tax Calculator to calculate the actual payable Income Tax for the FY 2016-17 / AY 2017-18.

Do keep your Form 16, and all Form 16-A ready with you to calculate the actual payable Income Tax.

Feel free to share your experience…

Definition of Person under Income Tax Act

Abhilash CU, M.Com, FCA, ACS

The term Person under Income Tax Act has wide meaning and interpretation than the normal meaning of person. The definition of person has a vide implication that “assesse “under the act is defined as a “person” by whom income tax or super tax or any other sum of money is payable under the act. So in order to be declared an assesse under the Income Tax Act, the assesse must be a “Person” as defined under the Income Tax Act of 1961.The term “Person” has been defined under Sec2(31) of the Income Tax Act of 1961. The definition of “Person” is as follows.

 "Person" includes—

1. An individual,
2. A Hindu Undivided Family,
3. A Company,
4. A Firm,
5. An Association of Persons or a Body of Individuals, whether incorporated or not,
6. A Local Authority, and
7. Every artificial juridical person, not falling within any of the preceding sub-clauses;

The definition is inclusive and not exhaustive i.e. any other Person can also be included under the definition of Person under Income Tax Act.

Individual refers to a natural human being whether male or female or transgender, minor or major.

A Hindu undivided family (HUF) is a relationship created due to operation of Hindu Law. The head of the HUF is Karta and the members are called Coparceners. Many state governments have abolished the status of HUF and they are prevalent in some states of the country only. The Karta is having two assessments i.e. One his individual assessment and the second in the capacity of Karta of HUF.

A Company is a company incorporated under Companies Act 2013 or any earlier acts.

A firm is an entity which comes into existence by virtue of a partnership agreement between persons to share profits or business carried on by all or any of them. LLP is also include in the definition of Firm

Association of Persons (AOP) are persons who combine together to form a joint enterprise but does not constitute a partnership. There must a common purpose and a common action to achieve the common purpose for which the AOP is constituted. AOP can have individuals, firms, companies or Associations as its members. Body of Individuals as against AOP can have only individuals as members and non-individuals cannot be members.

A local authority Comprises of Corporation, Municipality, Panchayat, Cantonment board etc.

An Artificial Juridical person is a body having juridical personality of its own and a public corporation established under Special Act of Legislature. Artificial juridical person is an entity other than a natural person created/recognized/accredited by law and also recognized as a legal entity having distinct identity, legal personality and duties and rights. Eg: Universities, Lord Tirupathi Balaji, and Sabarimala Ayyappa etc. Any other body which does not fall under other 6 categories of person satisfying the above requirements can also be classified as an artificial juridical person.