Income tax Brackets by Naina Ruhail :Guest Post

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While calculating the income tax liability every year, the first and most important aspect which comes across one’s mind is the Income tax slabs.

Sadly, Union Budget for the year 2013-14 kept Income Tax rates unchanged in view of the rising fiscal deficit. The only benefit this financial year is that there is a tax credit of Rs 2000 for people having an annual income up to Rs 5 Lakh.

Some important tax terms that might help you while filing taxes are as follows:

Financial Year- Duration of one year between 1st April to 31st March of the following year, in which all financial data is reported.

Assessment Year- The income of a particular financial year is assessed in the following financial year, which is known as the assessment year.

Previous Year– is the financial year prior to the assessment year, the income of which is assessed in the following assessment year.

Given below are the Income Tax Slabs for you:

Tax Slabs for Male/Female (less than 65 years)
Income : up to 2 lakhs No Tax

Income : 2 lakhs to 5 lakhs 10 %

Income : 5 lakhs to 10 lakhs 20 %

Income : above 10 lakhs 30 %

Tax Slabs for Senior Citizen (60 to 80 years)

Income : up to 2.5 lakhs No Tax

Income : 2.5 lakhs to 5 lakhs 10 %

Income : 5 lakhs to 10 lakhs 20 %

Income : above 10 lakhs 30 %

Tax slabs for Super Senior Citizen (> 80 years)

Income : up to 5 lakhs No Tax
Income : 5 lakhs to 10 lakhs 20 %

Income : above 10 lakhs 30 %

There is a surcharge of 10 percent on persons whose taxable income exceeds Rs 1 crore per year.

This applies to individuals, HUFs, firms and entities with similar tax status.

Also, the above mentioned tax rates exclude Surcharge, Education tax and Secondary and Higher Education tax.

Calculating Income Tax

Calculating your Income tax was never so easy. It begins with the calculation of your gross total income which includes income from Form 16 and other sources. Secondly, you need to calculate your net deductions which comprise your donations, investments, as well as savings. Your net taxable income is your gross total income minus the net deductions. Lastly, you apply the appropriate income tax slab to get your tax payable on aggregate income. Finally, a 3% education tax is applied on the tax payable to get your total tax payable.

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