Income tax rates for FY 2015-16 changes on 28 February budget day

Finance Minister Mr. Arun Jaitley presented the Annual Budget in Lok Sabha on 28 February 2015. He proposed some changes in income tax rates for financial year 2015-16 analysis year 2016-17. However there is no change in basic exemption rate for individual as well as for companies.

However there are some changes too. A surcharge of 12% is levied on income exceeding Rs. 1 crore. For companies, surcharge of 7% will be charged on income above Rs. 1 crore and 12% surcharge on income above Rs. 10 crores.

For Foreign companies 2% surcharge on income above Rs. 1 crore and 5% surcharge on income above 10 crores.

 Other benefits to tax payers are as follows.
1- Limit of deduction of health insurance premium increased from `15000 to ` 25000, for senior citizens limit increased from `20000 to `30000.

2- Senior citizens above the age of 80 years, who are not covered by health insurance, to be allowed deduction of ` 30000 towards medical expenditures.

3- Deduction limit of ` 60000 with respect to specified decease of serious nature enhanced to ` 80000 in case of senior citizen.

4- Additional deduction of `25000 allowed for differently abled persons. ¾ Limit on deduction on account of contribution to a pension fund and the new pension scheme increased from ` 1 lakh to `1.5 lakh. 

5- Additional deduction of ` 50000 for contribution to the new pension scheme u/s 80CCD. 

6- Payments to the beneficiaries including interest payment on deposit in Sukanya Samriddhi scheme to be fully exempt. 

7- Service-tax exemption on Varishtha Bima Yojana.

8- Concession to individual tax-payers despite inadequate fiscal space. ¾ Lot to look forward to as fiscal capacity improves. 

9- Conversion of existing excise duty on petrol and diesel to the extent of ` 4 per litre into Road Cess to fund investment.

10- Service Tax exemption extended to certain pre cold storage services in relation to fruits and vegetables so as to incentivise value addition in crucial sector. 

11- Negative List under service-tax is being slightly pruned to widen the tax base.

12- Yoga to be included within the ambit of charitable purpose under Section 2(15) of the Income-tax Act. 

13- To mitigate the problem being faced by many genuine charitable institutions, it is proposed to modify the ceiling on receipts from activities in the nature of trade, commerce or business to 20% of the total receipts from the existing ceiling of ` 25 lakh.13 

14- Most provisions of Direct Taxes Code have already been included in the Income-tax Act, therefore, no great merit in going ahead with the Direct Taxes Code as it exists today.

15- Direct tax proposals to result in revenue loss of ` 8315 crore, whereas the proposals in indirect taxes are expected to yield ` 23383 crore. Thus, the net impact of all tax proposals would be revenue gain of `15068 crore.

Income tax slabs for FY 2015-16 relevant to analysis year 2016-17 are as follows.

For Individual (Male or Female) and H.U.F.
Slabs
Income tax rates
Income upto Rs. 250000
Nil
Income Above250000 to 500000
10%
Income Above 500000 to 1000000
20%
Income more than 1000000
30%
- There is an additional exemption under section 87A to the assessee whose income comes in 250001 to 500000, the exemption is on tax amount maximum of 2000 Rupees.
- Surcharge of 12% is applicable on income abvove Rs. 1 crore.
 - Education cess @3% will be charged on tax amount.

For Senior sitizen above 60 years but less than 80 years 
Slabs
Income tax rates
Income upto 300000
NIL
Income Above300000 to 500000
10%
Income Above 500000 to 1000000
20%
Income more than 1000000
30%
- There is an additional exemption under section 87A to the assessee whose income comes in 250001 to 500000, the exemption is on tax amount maximum of 2000 Rupees.
- Surcharge of 12% is applicable on income abvove Rs. 1 crore.
 - Education cess @3% will be charged on tax amount.

 For Senior citizen above 80 years 

Slabs
Income tax rates
Income upto 500000
NIL
Income Above 500000 to 1000000
20%
Income more than 1000000
30%

- Surcharge of 12% is applicable on income abvove Rs. 1 crore.
 - Education cess @3% will be charged on tax amount.
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