senior citizen income tax slab rate fy 2017-18
senior citizen income tax slab rate has changed a little bit in the financial year 2017-18.
We will discuss in depth the changes that took place in new Income tax slab rate for senior citizen fy 2017-18.
Firstly we talk of Income tax slab for senior citizen ay 2018-19 having age from 60 yrs to less than 80 yrs for fy 2017-18.
For your kind information,there is no tax for all senior citizen having income less than or equal to rs 300000 after availing saving under section 80C. In other words we can say income tax exemption slab for senior citizens is rs 3 lakhs.
It can be called as income tax relaxation for senior citizens.
It is very important to note here that you should deduct your saving under section 80C before calculating your tax.
Tax rate 5% on net income:
Further If your annual income is 5 lakh or less, after deducting your saving under section 80C upto rs 150000,then your remaining income is taxable at the rate of 5%.
And there will be a rebate of rs 2500 in case your net income is 3.5 lakh or less after deducting your saving u/s 80C.
20%Tax rate on net income.
Suppose your net income after deduction u/s 80C is 6 lakh,There will be no rebate of rs 2500 u/s 87A.
Further income after 5 lakh will be taxable at the rate of 20%.
30%Tax rate on net income.
Similarly if net taxable income is more than 10 lakhs,30% tax rate will be applicable.
How to calculate tax for Senior citizen
To make you understand properly we take relevant examples below:
Suppose you have annual pension rs 500000.Also if your savings are rs 150000.Now your net taxable amount becomes rs 350,000.
now in this case we see the net taxable income is 3.5 lakh.So you will get rebate of rs 2500 in this case.
Also in this case rs 3 lakhs are tax free.And remaining rs 50,000 are taxable at the rate of 5%. that is rs 2500.
Now in this case net taxable income is 3.5 lakh so take rebate of rs 2500.Consequently your tax becomes 2500-2500=0.
So if a senior citizen has net taxable income is 3.5 lakh,his tax liabilitiy is zero.
Let us suppose your net taxable income is 6 lakhs.
Now first 3 lakhs are tax free.So remaining 3 lakhs are taxable.
Here first 2 laks out of remaining 3 lakhs are taxable at the rate of 5%.And the remaining 1 lakh is taxable at the rate of 20%.
Thus In this case tax will become rs 15000+20000=35000.
So in this case there is no rebate as net taxable income is more than 3.5 lakhs.
We see from above explanation that new tax slab rate for fy 2017-18 has only two notable changes.One is 5% tax rate and second is rs 2500 rebate u/s 87A.
Hence senior citizens have less to cheer about this new tax slab rates changes for fy 2017-18.
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