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The chargeability is based on nature of income, i.e., whether it is revenue or capital. The rates of
taxation of income are-:
Income Tax Slabs and Rates for the Assessment Year 2016-17 (applicable on income earned
during 01.04.2015 to 31.03.2016) for various categories of Indian Income Tax payers.
Senior Citizen
Co-operative Society
Firm
Local Authority
Domestic Company
Other Company
TAX RATE
but
does
not
exceed
5,00,000/-
Where the taxable income exceeds Rs. Rs. 25,000/- + 20% of the amount by which
5,00,000/-
but
does
not
exceed
10,00,000/Where the taxable income exceeds Rs. Rs. 125,000/- + 30% of the amount by which
10,00,000/-
Surcharge - 12% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal
Relief in Surcharge, if applicable)
Education Cess - 3% of the total of Income Tax and Surcharge.
B. SENIOR CITIZEN
(Individual resident who is of the age of 60 years or more but below the age of 80 years at any
time during the previous year i.e. born on or after 1st April 1936 but before 1st April 1956)
INCOME SLAB
TAX RATE
Where the taxable income exceeds Rs. Rs. 20,000/- + 20% of the amount by which the
5,00,000/- but does not exceed Rs. 10,00,000/-
Where the taxable income exceeds Rs. Rs. 120,000/- + 30% of the amount by which
10,00,000/
Surcharge - 12% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal
Relief in Surcharge, if applicable)
EducationCess - 3% of the total of Income Tax and Surcharge.
TAX RATES
Where the taxable income exceeds Rs. Rs. 100,000/- + 30% of the amount by which
10,00,000/-
Surcharge - 12% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal
Relief in Surcharge, if applicable)
Education Cess - 3% of the total of Income Tax and Surcharge.
D. CO-OPERATIVE SOCIETY
INCOME SLABS
TAX RATE
Where the taxable income does not exceed Rs. 10% of the income.
10,000/
Where the taxable income exceeds Rs. 10,000/- Rs. 1,000/- + 20% of income in excess of Rs.
but does not exceed Rs. 20,000/-.
10,000/-.
Where the taxable income exceeds Rs. 20,000/- Rs. 3.000/- + 30% of the amount by which the
taxable income exceeds Rs. 20,000/-.
Surcharge - 12% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal
Relief in Surcharge, if applicable)
Education Cess - 3% of the total of Income Tax and Surcharge.
E. PARTNERSHIP FIRM
Income Tax 30% of taxable income.
Surcharge - 12% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal
Relief in Surcharge, if applicable)
Education Cess - 3% of the total of Income Tax and Surcharge.
F. LOCAL AUTHORITY
Income tax - 30% of taxable income.
Surcharge - 10% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal
Relief in Surcharge, if applicable)
Education Cess - 3% of the total of Income Tax and Surcharge.
G. DOMESTIC COMPANY
Income Tax : 30% of taxable income.
Surcharge - The amount of income tax as computed in accordance with above rates, and after
being reduced by the amount of tax rebate shall be increased by a surcharge
At the rate of 7% of such income tax, provided taxable income exceeds Rs. 1 crore.
At the rate of 12% of such income tax, provided that the taxable income exceeds Rs. 10
crores.
Amt
Amt
ITR
FORM
DESCRIPTION OF TAXPAYER
NAME
This is applicable to all individuals having salary or pension income
ITR 1
ITR 2
This is for Hindu Undivided Families that have income from sources
other than Profits and Gains of Business or Profession.
This is for Hindu Undivided Families or individuals who are
partnered in a firm. The income here is either by the way of interest,
ITR 3
ITS 4S
ITR 4
ITR 5
trusts, political parties, colleges, etc. who are required to instead file
return of income under Sections 139(4A), 139(4B), 139(4C) and
139(4D) and do not use this form.
This for companies that dont claim exemptions under Section 11.
ITR 6
ITR 7
This is for persons and companies who are required to furnish returns
under Sections 139(4A), 139(4B), 139(4C) and 139(4D).
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CHAPTER 2
DEDUCTIONS FROM GROSS TOTAL INCOME
2.1 DEDUCTIONS UNDER SECTION 16
A. ENTERTAINMENT ALLOWANCE [SECTION 16(II)]
A deduction is also allowed under section 16(ii) in respect of any allowance in the nature
of an entertainment allowance specifically granted by an employer to the assessee, who is
in receipt of a salary from the Government, a sum equal to one-fifth of his
salary(exclusive of any allowance, benefit or other perquisite) or five thousand rupees
whichever is less. No deduction on account of entertainment allowance is available to
non-government employees.
B. TAX ON EMPLOYMENT [SECTION 16(III)]
The tax on employment (Professional Tax) within the meaning of article 276(2) of the
Constitution of India, leviable by or under any law, shall also be allowed as a deduction
in computing the income under the head "Salaries".
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Payment made towards life insurance policies (for self, spouse or children)
Section 80C has an exhaustive list of deductions an individual is eligible for, which have led
to the creation of suitable sub-sections to provide clarity to taxpayers.
a) SECTION 80 CCC ( DEDUCTION FOR PREMIUM PAID FOR ANNUITY PLAN
PR PTHER INSURER)
Section 80 CCC of the Income Tax Act provides scope for tax deductions on investment
in pension funds. These pension funds could be from any insurer and a maximum
deduction of Rs 1.5 lakh can be claimed under it. This deduction can be claimed only by
individual taxpayers.
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c) SECTION
80
CCF
(DEDUCTION
IN
RESPECT
OF
LING
TERM
INFRASTRUCTURE BONDS)
Open to both Hindu Undivided Families and Individuals, Section 80 CCF contains
provisions for tax deductions on subscription of long-term infrastructure bonds which
have been notified by the government. One can claim a maximum deduction of Rs
20,000 under this Section.
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13
14
Under Section 80E of the Income Tax Act has been designed to ensure that educating
oneself doesnt become an additional tax burden. Under this provision, taxpayers are eligible
for tax deductions on the interest repayment of a loan taken to pursue higher education. This
loan can be availed either by the taxpayer himself/herself or to sponsor the education of
his/her ward/child. Only individuals are eligible for this deduction, with loans taken from
approved charitable organizations and financial institutions permitted for tax benefits.
15
Deductions under Section 80TTA can be claimed by Hindu Undivided Families and
Individual taxpayers. This section permits deductions to the tune ofRs 10,000 every year on
the interest earned on money invested in bank savings accounts in the country.
Tax deductions under Section 80U can be claimed only by resident individual taxpayers who
have disabilities. Individuals who have been certified by relevant medical authorities to be a
Person With Disability can claim a maximum deduction of Rs 75,000 per year.
Individuals who have severe disabilities are entitled to a maximum deduction of Rs 1.25
lakh, subject to them meeting certain criteria. Some of the disabilities which classify for tax
benefits are autism, mental retardation, cerebral palsy, etc.
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CHAPTER 3
INCOME EXEMPTED FROM TAX
3.1 GRATUITY- SEC 10(10)
As per Sec 10 (10) of Income Tax Act, gratuity is paid when an employee completes 5 or more
years of full time service with the employer (minimum 240 days a year).
The gratuity so received by the employee is taxable under the head Income from salary. In case
gratuity is received by the nominee/legal heirs of the employee, the same is taxable in their hands
under the head Income from other sources. This tax treatment varies for different categories of
individual assesses. We shall discuss the tax treatment of gratuity for each assesses in detail.
For the purpose of calculation of exempt gratuity, employees may be divided into 3 categories
(a) Government employees and
(b) Non-government employees covered under the Payment of Gratuity Act, 1972
(c) Non-government employees not covered under the Payment of Gratuity Act, 1972
In case of government employees they are fully exempt from receipt of gratuity.
In case of non-government employees covered under the Payment of Gratuity Act, 1972
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Completed year of service (no part thereof) means: full time service of > 1 year is
considered as 1 completed year of service. < 1 year is ignored.
Average salary =10 months salary (immediately preceding the month of leaving the job)/10
FIND OUT
FORMULA
RESULT
1.
= (A)
2.
Completed year of
Retirement date
= (B)
service
joining date
15 days salary
Year of service *
3.
salary * 15/26=
(A*B*15/26)
4.
Least of
Gratuity exempt
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= (C)
received.
19
1/3rd
of the amount of pension which he would have received had he commuted the
EXEMPTION
of the amount of pension which he would have received had he commuted the
whole of the pension
20
50% of the salary where residential house is situated at Bombay, Calcutta, Madras or Delhi and
40% of the salary where residential house is situated at any other place.
House Rent Allowance actually received by the Employee in respect of the period during which
the residential accommodation is occupied by him during the year.
Amount of rent paid in excess of 10% of the salary. Besides the above, there are certain other
incomes also, which are totally exempt or exempt subject to fulfillment of certain conditions.
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REFERENCES
A. https://en.wikipedia.org/wiki/Income_tax_in_India
B. http://taxguru.in/income-tax/income-tax-provisions-related-to-income-fromsalary.html
C. https://www.bankbazaar.com/income-tax.html
D. http://cawinners.com/income-under-head-salary/
E. http://www.google.co.in/www.incometaxindia.gov.in
F. http://cacmacsclub.com/income-from-salaries-notes/
G. http://www.google.co.in/commercehub.webs.com
H. http://incometaxmanagement.com/Pages/Gross-Total-Income/Salaries/Chat-ShowingComputation-of-Salary-Income.html
I. http://www.google.co.in/www.dawnhrs.co.inIncome_Under_Various_Heads.
J. http://www.cutmytax.com/salary-deductions/
K. http://taxguru.in/income-tax/deductions-chapter-applicable-assessees-incomesalaries.html
L. https://cleartax.in/Salary
M. http://www.charteredclub.com/income-tax-exemptions-for-salaried-employees/
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