The Union Budget, 2018 has not made any major changes in the Income Tax Rates for Individuals. We are noting below the method of calculating the Income Tax on Individuals, HUF, AOP & BOI and KEY Tax Planning provisions under Income Tax Act, 1961 for the F. Y. 2018-19:-
SECTION 1 : TAX CALCULATION
A) Tax Calculator (General Category & Women):-
| SLAB | TOTAL INCOME | Rate
of Tax |
TAX CALCULATOR | COMMENTS |
| I | Upto Rs. 2,50,000/- | 0 % | NIL | NO CHANGE |
| II | Rs. 2,50,001/- to Rs. 5,00,000/- | 5% | (Total Income – 2,50,000)*5% | NO CHANGE |
| III | Rs. 5,00,001/- to Rs. 10,00,000/- | 20 % | 12500 + (T.I. – 500000)*20% | NO CHANGE |
| IV | Above Rs. 10,00,000/- | 30 % | 112500+(T.I.–10,00,000)*30% | NO CHANGE |
B) Tax Calculator (Senior Citizen – Age 60 Years):-
| SLAB | TOTAL INCOME | Rate
of Tax |
TAX CALCULATOR | COMMENTS |
| I | Upto Rs. 3,00,000/- | 0 % | NIL | NO CHANGE |
| III | Rs. 3,00,001/- to Rs. 5,00,000/- | 5% | (Total Income – 3,00,000)*5% | NO CHANGE |
| IV | Rs. 5,00,001/- to Rs. 10,00,000/- | 20 % | 10000 + (T.I. – 500000)*20% | NO CHANGE |
| V | Above Rs. 10,00,000/- | 30 % | 110000+(T.I.–10,00,000)*30% | NO CHANGE |
C) Tax Calculator (Very Senior Citizen – Age 80 Years):-
| SLAB | TOTAL INCOME | Rate
of Tax |
TAX CALCULATOR | COMMENTS |
| I | Upto Rs. 5,00,000/- | 0 % | NIL | No Change |
| II | Rs. 5,00,001/- to Rs. 10,00,000/- | 20 % | (T.I. – 5,00,000)*20 % | No Change |
| III | Above Rs. 10,00,000/- | 30 % | 1,00,000+(T.I.–10,00,000)*30 % | No Change |
SECTION 2 : SURCHARGE & EDUCATION CESS
Surcharge – Total Income upto Rs. 50 Lakhs : NIL
Total Income > 50 Lakhs <= 1 Crore : 10%
Total Income > 1 Crore : 15%
Health & Education Cess – 4% of the Income Tax & Surcharge (replaced 3% Cess in preceding year)
SECTION 3 : KEY TAX SAVINGS PROVISIONS UNDER INCOME TAX ACT, 1961
| Section | Nature | Deduction Upper Limit | Comments |
| 16 (ia) | Standard Deduction to Salaried Employees | 40000/- | Existing Transport Allowance upto Rs. 19200/- & Medical 15000/- has been withdrawn. |
| 24 (b) | Interest on Housing Loan (Self Occupied) | Upto Rs. 2 Lakhs
|
No Change |
| 80 C | Investments in Life Insurance Premium, PF, PPF, NSC, ULIP, Tax Benefit Mutual Funds, Tution Fees (2 Child), Home Loan Principal Repayment, Notified Bonds, 5 Yr FDs etc | Upto Rs. 1.50 Lakhs | No Change |
| 80 CCD | Investment in Pension Scheme | Upto Rs. 0.50 Lakhs | For individuals other than employee – limit of investment in NPS increased to 20% of GTI |
| 80 D | Mediclaim Insurance | Sr. Citizen : Rs. 50000/-
Others : Rs. 25000/- |
The Limit Increased for Senior Citizens from 30000 to 50000 |
| 80 E | Interest on Education Loan
(Upto maximum 8 years from the year of first repayment) |
Entire Interest Paid during the year | Conditions:-
1. Education Loan must be taken by that Individuals; 2. For Higher Education of Self, Spouse, Children or student for whom, he is a legal guardian; 3. The loan is taken from any Financial Institution or approved Charitable Institution; |
| 80 GG | Rent Paid | Lower of Following:
1. Rs. 5000 p.m. 2. 25% of Total Income; 3. Rent Paid – 10% of Total Income |
No Change |
| 80TTA | Interest from Savings Account | Rs. 10000/- | This is allowed to the extent of Interest earned from Savings Account. No Benefit under this section if benefit u/s 80TTB is claimed. |
| 80TTA | Interest from Deposits in Banking Co or Post Office | Rs. 50000/- | Only for Senior Citizens (Age 60 years) without TDS Liability. |
| 87A | Rebate | 2500/- or Tax Liability whichever is lower | Applicable only for Individuals & HUF with Total Income upto 3,50,000/- |