Your income from salary, business or other income like income from fixed/recurring deposits etc are taxed as per income tax slabs. Budget 2018 has made no change to the tax slab rates, however following changes have been made:
- No change in Tax Slabs
- Additional cess of 1% for health care making total cess to 4% of income tax payable
- Standard deduction of Rs 40,000 for Salaried and Pensioners
- Transport Allowance of Rs 1,600 per month & Medical Reimbursement of Rs 15,000 per year abolished for salaried (but remains for differently enabled). So net gain of Rs 5,800 for salaried [Rs 40,000 – Rs 1600 * 12 – Rs 15,000]
- Exemption on interest income from Rs 10,000 to Rs 50,000 for senior citizens.
- Medical Insurance premium exemption for senior citizen increased from Rs 30,000 to Rs 50,000 u/s 80D
- Medical expenses will see increased tax benefits for senior citizens. 100,000 on critical illness u/s 80DDB
Income Tax Slabs:
There is NO separate tax slab for men and women. Earlier women used to have slight benefit over men in terms of lower taxes!
The tax slabs are determined on age of person. As of today there are 3 slab rates based on age:
- Below 60 years of age
- Senior Citizens (60 to less than 80 years of age)
- Very Senior Citizens (80+ years of age)
How much taxes you pay next year? Download FY 2018-19 Income Tax Calculator
The table below gives the tax slab rates:
Income Tax Slab for HUFs & Individuals (below 60 years – for both Men & Women)
| Income Slab | Tax Rate |
| Income up to Rs 2,50,000 | No Tax |
| Income from Rs 2,50,000 – Rs 5,00,000 | 5% |
| Income from Rs 5,00,000 – 10,00,000 | 20% |
| Income more than Rs 10,00,000 | 30% |
| |
Income tax slab for senior citizens (60 years to less than 80 years old) (both men & women)
| Income Slab | Tax Rate |
| Income up to Rs 3,00,000 | No Tax |
| Income from Rs 3,00,000 – Rs 5,00,000 | 5% |
| Income from Rs 5,00,000 – 10,00,000 | 20% |
| Income more than Rs 10,00,000 | 30% |
| |
Income tax slab for Very senior citizens (80 years or more) (both men & women)
| Income Slab | Tax Rate |
| Income up to Rs 2,50,000 | No Tax |
| Income from Rs 2,50,000 – Rs 5,00,000 | No Tax |
| Income from Rs 5,00,000 – 10,00,000 | 20% |
| Income more than Rs 10,00,000 | 30% |
| |
Income tax slab for Domestic Companies:
| Company Turnover | Tax Rate |
| Less than 250 crore | 25% |
| More than 250 crore | 30% |
Surcharge:
Health Cess: 1% cess on income tax including surcharge Education Cess: 2% cess on income tax including surcharge Secondary and Higher Education Cess: 1% cess on income tax including surcharge | |
Also Read: 25 Tax Free Incomes & Investments in India
Income tax slab for Partnership Firm:
A partnership firm (including LLP) income is taxable at 30%.
Surcharge: 12% surcharge on income tax if the total income exceeds Rs 1 crore
Health Cess: 1% cess on income tax including surcharge
Education Cess: 2% cess on income tax including surcharge
Secondary and Higher Education Cess: 1% cess on income tax including surcharge
Capital Gains Tax Rates:
Some income related to capital gains are taxed at special rates as shown below:
| Capital Gains | Tax Rate |
| Short term capital gains from assets (Other than shares & mutual funds) | At Income Tax Slab rates listed above |
| Long term capital gains from assets (Other than shares & mutual funds) | 20% (+4% edu + health cess) |
| Short term capital gains on shares and equity mutual funds | 15% (+4% edu + health cess) |
| Long term capital gains on shares and equity mutual funds | 10% (+4% edu + health cess) |
| Short term capital gains on debt mutual funds | At Income Tax Slab rates listed above |
| Long term capital gains on debt mutual funds | At 20% (+4% edu + health cess) with indexation |
Very useful information
form 16
Hi Amit
Great Post. Filing income tax return on time is the duty of every responsible citizen. But for that, we need to know the rules of Income Tax set by tax department. can you just Explain the rules.
Thanks
Does handicapped person gets additional 38,400 (3200 * 12) benefit apart from Standard Deduction of 40,000 ?
yes
4% Cess not applicable on partnership firm?
It is – had missed it – corrected now. Thanks for pointing it out
Hi,
What does Standard deduction of Rs 40,000 for Salaried and Pensioners means?
Is conveyance allowance has increased beyond 19200
Conveyance Allowance & Medical reimbursement is subsumed in the standard deduction. This means you’ll have no conveyance allowance (or it will not be tax free)