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income-tax-slabs-fy-2018-19

 

Income Tax Slab for the Financial Year 2018-19

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Every tax payer should understand Income tax slab for the financial year 2018-19. I have already discussed Income tax slab for the financial year 2017-18  in detail with example and See posts : How to e-file Income Tax Return and How to downloand form 26AS online.

No Change in Income Tax Slab in financial year 2018-19, it remains the same as that of last year i.e. financial year 2017-18.


Introduction to Income Tax Slab for the F.Y. 2018-19

Income Tax Slabs depends mainly on your status like an Individual (resident or not), an HUF, a company, a firm, an AOP/BOI & Local authorities.
  • No tax for individuals with income less than ₹ 2,50,000
  • 5% tax with income Rs 2.5 lacs to 5 lacs for different age groups
  • 20% tax with income Rs 5 lacs to 10 lacs
  • 30% tax with income above Rs. 10 lacs.
  • Invest up to Rs.1.5 lacs under Section 80C and save tax.
  • Invest up to Rs. 50,000 in NPS (National Pension Scheme u/s 80CCD (1B) and save tax.
  • Other deductions under section 80D, 80E, 80EE, 80G, 80TTA and section 24 (subject to the payment and conditions apply) can also be availed and save tax.
  • Tax Rebate u/s 87A is available to Residents (Not NRI) whose total income does not exceed Rs. 3,50,000 during the financial year, allowed up to (Rs. 2500 or 100% of Tax whichever is less)

Main changes in Budget 2018-2019 are as follows :
  • Standard Deduction allowed for Rs. 40,000 to individuals in place of (Transport allowance Rs 19,200 p.a. and reimbursement of medical expenses Rs 15,000 p.a.)
  • There is no change in the income tax exemption limit.
  • Education cess now to be called as Health and Education cess and the rate increased to 4% from 3%.
  • For Senior Citizens:
    • Exemption of interest income on deposits with banks and post offices increased from ₹ 10,000 to ₹ 50,000 under section 80TTB
    • Increase in deduction limit for health insurance premium from ₹ 30,000 to ₹ 50,000 under section 80D.
    • Increase in deduction limit for medical expenditure for certain critical illness from Rs. 60,000 (in case of senior citizens) and from Rs. 80,000 (in case of very senior citizens) to Rs. 1 lac for all senior citizens, under section 80DDB.

Individual Resident taxpayers lie in three categories:
  1. Individuals (below the age of 60 years) whether resident or non-resident Indian.
  2. Resident Senior citizens (age of 60 years and above but below 80 years)
  3. Resident Super senior citizens (age of 80 years or above 80 years).
1. Income Tax Slabs for Individual Tax Payers (with age less than 60 Years)
Income Tax Slabs Tax Rate Health and Education Cess
Income up to Rs 2,50,000 No tax
Income from Rs 2,50,000 – Rs 5,00,000 5% 4% of Income Tax
Income from Rs 5,00,000 – 10,00,000 20% 4% of Income Tax
Income more than Rs 10,00,000 30% 4% of Income Tax
  • Surcharge: 10% of income tax, where total income exceeds Rs.50 lac up to Rs.1 crore.
  • Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.
  • Tax Rebate u/s 87A is available to Residents (Not NRI) whose total income does not exceed Rs. 3,50,000 during the financial year, allowed up to (Rs. 2500 or 100% of Tax whichever is less)
2. Income Tax Slabs for Senior Citizens (with age 60 Years or more but less than 80 Years)
Income Tax Slabs Tax Rate Health and Education Cess
Income up to Rs 3,00,000 No tax
Income from Rs 3,00,000 – Rs 5,00,000 5% 4% of Income Tax
Income from Rs 5,00,000 – 10,00,000 20% 4% of Income Tax
Income more than Rs 10,00,000 30% 4% of Income Tax
  • Surcharge: 10% of income tax, where total income exceeds Rs.50 lac up to Rs.1 crore.
  • Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.
  • Tax Rebate u/s 87A is available to Residents (Not NRI) whose total income does not exceed Rs. 3,50,000 during the financial year, allowed up to (Rs. 2500 or 100% of Tax whichever is less)
3. Income Tax Slabs for Senior Citizens (with the age of 80 Years or More)
Income Tax Slabs Tax Rate Health and Education Cess
Income up to Rs 5,00,000 No tax
Income from Rs 5,00,000 – 10,00,000 20% 4% of Income Tax
Income more than Rs 10,00,000 30% 4% of Income Tax
  • Surcharge: 10% of income tax, where total income exceeds Rs.50 lac up to Rs.1 crore.
  • Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.
  • Tax Rebate u/s 87A is available to Residents (Not NRI) whose total income does not exceed Rs. 3,50,000 during the financial year, allowed up to (Rs. 2500 or 100% of Tax whichever is less)
4. Income Tax Slabs for HUF/AOP/BOI and any other Artificial Juridical Person
Income Tax Slabs Tax Rate Health and Education Cess
Income up to Rs 2,50,000 No tax
Income from Rs 2,50,000 – Rs 5,00,000 5% 4% of Income Tax
Income from Rs 5,00,000 – 10,00,000 20% 4% of Income Tax
Income more than Rs 10,00,000 30% 4% of Income Tax
  • Surcharge: 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.
  • Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.
Income Tax Comparison between Financial Year 2017-18 and 2018-19 Financial year 2018-19 leads to more tax savings.
Sources  of income As per F.Y. 2017-2018 As per F.Y. 2018-2019
Taxable Income 4,80,000 4,80,000
Standard Deduction 0 40,000
Transport allowance 19,200 0
Medical reimbursement 15,000 0
Net Taxable Income 4,45,800* 4,40,000*
Tax 9,790 9,500
Cess 293.70 380
Total Tax to be paid 10083.70 9880.00
Savings 203.70
*Rebate u/s 87A of Rs.2500/- cannot be claimed because the taxable income exceeded the limit of Rs. 3, 50,000/-



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