Budget 2017-18 Income Tax Relaxation Highlights

Income Tax Relaxation Highlights

1. Reduction in income tax rate from 10% to 5% for tax slab of Rs 250,000 to Rs 500,000.
2. All categories of tax payers in subsequent higher brackets will get a benefit of Rs 12,500.
3. As a result of the combined effect of the new Section 87A rebate and the reduction in the lowest slab tax rate to 5% the tax burden for those with income upto Rs 3 lakh would be zero and tax burden those in the Rs 3 lakh to Rs 3.5 lakh bracket would be Rs 2500.
4. Those earning Rs 4.5 lakh can therefore reduce their tax liability to zero by investing Rs 1.5 lakh under Section 80C.
5. Surcharge of 10% for those whose annual income is Rs 50 lakh to 1 crore .
6. 15% surcharge on incomes above Rs 1 crore to continue.
7. A scheme for senior citizens to ensure 8% guaranteed returns to be managed by Life Insurance of India (LIC) .
8. The existing rebate under Section 87A (currently given to people with income up to Rs 5 lakh) is proposed to be reduced to Rs 2500 from the existing Rs 5000 for individuals earning between Rs 2.5 lakh to Rs 3.5 lakh.
9. Reduction in the holding period for computing long term capital gains from transfer of immovable property from 3 years to 2 years.
10. Proposal of shifting of the base year for indexation from 01.04.1981 to 01.04.2001 for all classes of assets including immovable property.
11. Small firms having turnover up to Rs 50 crore p.a.to pay 25% tax now, instead of 30%. Approximately 67 lakh companies are under this category and out of them, around 96% will get benefitted by this.
12. Simplification in filing of Income Tax Returns through simple one page form for the people having an annual income upto Rs. 5 lakh, other than business income.
13. No government scrutiny on people filing I-T returns for the first time.