Income Tax Rates

Income tax slab rates for FY 2015-16 (AY 2016-17)

As this is the maiden Budget of Modi sarkar, everyone was expecting many things from every sector. Even people are demanding for complete abolition of tax system in our country. But it may not be possible very soon. At least after seeing this year's Budget, one can't think about Income tax abolition form our country soon. Anyway simply reminding you the latest income tax slab rates for FY 2015-16 (AY 2016-17), which is nothing new

For Men :

Income tax slab (in Rs.) Tax
0 to 2,50,000 Nil
2,50,001 to 5,00,000 10%
5,00,001 to 10,00,000 20%
Above 10,00,000 30%

For Women:

Income tax slab (in Rs.) Tax
0 to 2,50,000 Nil
2,50,001 to 5,00,000 10%
5,00,001 to 10,00,000 20%
Above 10,00,000 30%

For Senior citizens (Aged 60 years but less than 80 years)

Income tax slab (in Rs.) Tax
0 to 3,00,000 Nil
3,00,001 to 5,00,000 10%
5,00,001 to 10,00,000 20%
Above 10,00,000 30%

For very senior citizens (Aged 80 and above)

Income tax slab (in Rs.) Tax
0 to 5,00,000 Nil
5,00,001 to 10,00,000 20%
Above 10,00,000 30%

Income Tax Changes in last year Budget

This year couple of things changed after budget 2014-15. Although lot more was expected to change but Govt. touched few things only. Anyway let's check out the significant changes in this year's Income tax

  • Income Tax Slab has been increased up to 2.5 lalk from 2 lakh of current exception slab for men and women. And for senior Citizens it has raised up to 3 lakh.
  • Finally home loan interest exception has been hiked to 2 lakh from current 1.5 lakhs. This is a much expected hike and this will really boost the reality sector and for people who are planning to buy new flats.
  • PPF limit has been increased to 1.5 lakh from current 1 lakh per person. PPF is the best financial tool for a long term investment point of view and this will encourage savings.
  • 80C investment limit has been increased to 1.5 lakh from current 1 lakh which is also a very good move by Modi Sarkar as we can now invest more and save more income tax.

Income Tax Slab and Rules After Budget 2015- 2016

Last year was really great for tax payers as we have see many changes. But this year there is no change in income tax slab. But that doesn't mean that anything to worry. Off-course expectations were there, but still few expectations are taken care. Let's see few changes in this year's budget which may be useful for a salaried tax payer.

  • Extra tax deduction of 50,000 under investment of NPS (National Pension Scheme) under section section 80CCD. It is increased from 1 lakh to 1.5 lakh now. The vision wise this may be good, but NPS is not at all a good retirement product due to liquidity issue.
  • The mediclaim policy exemption limit under section 80D has also increased to 25,000 from existing 15,000. This is a good step as this will help people to go for a good health insurance for complete family.
  • Senior citizens more than 80 years, who don't have health insurance can get tax exemption of 30,000 if they buy health insurance. I don't know how many people are there who falls in this category.
  • Wealth tax is abolished completely. This might be a good step as calculating wealth tax and controlling was not beneficial for both individual and Govt. But a new 2% surcharge is going to levy for people earning more than 1 crore income. So far it was 105, but it will go further 12%.
  • Transport allowance has increased from Rs 800 to 1600. I don't see anything to enjoy, just a routine increase.
  • Sukanya Samriddhi Account interest earn and maturity value will be completely tax free. So its finally clear and now one can say that it is as good as PPF account.
  • Re-introduction of tax free bonds for funding infrastructure, irrigation, road etc.
  • PAN number is must for any sale over 1 lakh.
  • Rules are going to more strict and punishment will be harder for skipping or avoiding paying income tax.

Althought there is no change in income tax slab this year, this Budget 2015-16 is good form long term point of view, as per experts. This budget will encourage for buying more health insurance, which is a good move. Also encourage to save more under NPS to secure their retirement. What do you think about this budget? FM said that one can save max 4.44 lakh from the current income tax slab rates. But in reality how many people will actually save that much amount? Share your thoughts and feedback if any by writing a comment below.