Income tax for individual is what most tax payers want to know in Budget. In Budget 2016, the finance minister has made little changes to this. We highlight the changes and give you the new tax calculator for FY 2016-17 [AY 2017-18].
Changes in Income Tax Rules:
1. There has been no change in the income tax slabs.
2. For people with net taxable income below Rs 5 lakh, the tax rebate has been increased from Rs 2,000 to Rs 5,000 u/s 87A. This would benefit people who have net taxable income between Rs 2.7 Lakhs to Rs 5 Lakhs.
3. Additional exemption for first time home buyer up to Rs. 50,000 on interest paid on housing loans. This would be applicable where the property cost is below Rs 50 Lakhs and the home loan is below Rs 35 lakhs. The loan should be sanctioned on or after April 1, 2016.
4. Tax Exemption u/s 80GG (for rent expenses who do NOT have HRA component in salary) has been increased from Rs 24,000 to Rs 60,000 per annum. This is a good move to align the exemption amount with today’s rent and keep the section relevant.
5. For people with net taxable income above Rs 1 crore, the surcharge has been increased from 12% to 15%
6. Dividend Income in excess of Rs. 10 lakh per annum to be taxed at 10%
8. Presumptive taxation scheme introduced for professionals with receipts up to Rs. 50 lakhs. The presumptive income would be 50% of the revenues.
9. Exemption to employer’s contribution to recognized provident funds limited to 1.5 lakh. Earlier, the cap was up to 12% of salary
Also Read: Calculate Tax on Arrears in 7 Easy Steps
Income Tax Slab for FY 2016-17 [AY 2017-18]
There is no change in income tax slabs except additional 3% increase in cess for super rich (i.e. individuals with income > 1 crore). For Income Tax Purpose – citizens above age of 60 are considered as Senior Citizens and above age of 80 are considered Very Senior citizens.
Download Income Tax Calculator
You can download the Income Tax Calculator for FY 2015-16 [AY 2016-17] from the link below. You might need to unlock this by any of the options below:
Limitations of the Calculator:
- This Calculator is for people with only one home
- It does not computes Capital Gains Tax
These features might be incorporated in next versions of the Tax calculator