Budget 2017-18 Income Tax Relaxation Highlights, Income Tax Relaxation in Budget 2017-18

Income Tax Relaxation Highlights

  • Reduction in income tax rate from 10% to 5% for tax slab of Rs 250,000 to Rs 500,000.
  • All categories of tax payers in subsequent higher brackets will get a benefit of Rs 12,500.
  • 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.
  • Those earning Rs 4.5 lakh can therefore reduce their tax liability to zero by investing Rs 1.5 lakh under Section 80C.
  • Surcharge of 10% for those whose annual income is Rs 50 lakh to 1 crore .
  • 15% surcharge on incomes above Rs 1 crore to continue.
  • A scheme for senior citizens to ensure 8% guaranteed returns to be managed by Life Insurance of India (LIC) .
  • 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.
  • Reduction in the holding period for computing long term capital gains from transfer of immovable property from 3 years to 2 years.
  • 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.
  • 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.
  • 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.
  • No government scrutiny on people filing I-T returns for the first time.