Income tax rate / slab for AY 2018-19 / FY 2017-18
Income tax rates and slabs in India are an important aspect impacting each and every salaried person. From individual perspective, they want the tax rate as low as possible. While from government perspective, it want to increase the money collected from tax without impacting the economy.
FY 2017-18 (AY 2018-19) starts from Apr 1, 2017 and end of Mar 31, 2018. It is a crucial year from tax and budget perspective due to demonitisation impact on economy.
Below is the income tax slab and rates based on budget 2017 presented on Feb 1, 2017.
Income Tax Slab for AY 2018-19 / FY 2017-18
Note: Income tax on Rs 2.5 - 5 lakh income cut to 5% from 10%. 10% surcharge above Rs 50 lakh.
As per general expectations, people are expecting lower tax for FY 2017-18 due to immense impact of demonitisation on the economy. In the past, govt has given signals and based on that, people are expecting that income tax rates / slabs will remain unchanged but there will be standard deduction made available across the board.
| Income Slab | Income Tax Rate | Education Cess |
|---|---|---|
| <= 2.5 Lakh | Nil | Nil |
| 2.5L - 5L | 5% | 3% |
| 5L - 10L | 20% | 3% |
| > 10L | 30% | 3% |
| > 50L | 30% | 3% |
In addition to above,
* For people having income above 50 lakh, there is a surcharge cess of 10% on total tax amount. This is in addition to 3% education cess, so total cess of 13%.
Reduction from 10% to 5% is a great move for Indian salary class.
| Income Slab | Income Tax Rate | Education Cess |
|---|---|---|
| <= 2.5 Lakh | Nil | Nil |
| 2.5L - 5L | 5% | 3% |
| 5L - 10L | 20% | 3% |
| > 10L | 30% | 3% |
| > 50L | 30% + 10% (surcharge) | 3% |
| Income Slab | Income Tax Rate | Education Cess |
|---|---|---|
| <= 5 Lakh | Nil | Nil |
| 5L - 10L | 20% | 3% |
| > 10L | 30% | 3% |
| > 50L | 30% + 10% (surcharge) | 3% |
Income Tax Slab Rate cut to 5% below 5 Lakh
As part of budget 2017, income tax rate for income upto 5 lakh has been cut to 5% from existing 10%. This will bring huge relief for small taxpayers.
Additionally no income tax slab has been raised from existing 2.5 lakh to 3 Lakh.
Especially this will be a great boost for low income salaried class. Along with on-going cleanup and digitisation of Employee provident fund through EPF UAN Login based tracking of money deposited in PF, this will help lower middle class tremendously.
Related
For more information, please go through our income tax guide or Income tax India Efiling guide
Category: finance income-tax