Here are Steps for Calculating Income Tax

In India, the Income-tax Act entails the rules and regulations to follow, for computation of tax. The Act establishes different tax slabs for calculating the taxes for a person based on different categories. Every year the slab rates are finalized in the Union Budget. Depending upon the income earned by a person the slab rates vary, and so does the tax.

Tax Slabs

The tax which needs to be paid can be easily computed using an Income Tax Calculator which is freely available online. In order to use it, there are a few details which you need to provide. These include exemption details, income details, details of deduction under income tax Form 16 A among other to get the desired details from the calculator.

form 16A

The slabs for income tax have been divided based on the type of person, age, and category. Individuals and HUF (Hindu Undivided Families) have been divided into the following three categories –

1. Residents as well as non-residents below the age of 60 years

2. Senior citizen resident equal to or between the age of 60 years and 80 years

3. Super senior citizen resident above 80 years of age

Income Tax Slab Rates for Individual and HUF Tax Payers above 60 Year of Age and below 80 Years of Age (FY 2017-2018)

Income Tax SlabsTax ImpliedHealth and Education Cess
Up to Rs. 3 lakh per annumNo Tax
From Rs. 3 lakh to Rs. 5 lakh per annum5%3% on Income Tax
From Rs. 5 lakh to Rs. 10 lakh per annum20%3% on Income Tax
More than Rs. 10 lakh per annum30%3% on Income Tax
From Rs. 50 lakh to Rs. 1 Crore30% 3% on Income Tax + 10% Surcharge on Income Tax
More than Rs. 1 Crore30%3% on Income Tax + 15% Surcharge on Income Tax

Income Tax Slab Rates for Individual and HUF Tax Payers above 80 Year of Age (FY 2017-2018)

Income Tax SlabsTax ImpliedHealth and Education Cess
Up to Rs. 5 lakh per annumNo Tax
From Rs. 5 lakh to Rs. 10 lakh per annum20%3% on Income Tax
More than Rs. 10 lakh per annum30%3% on Income Tax
From Rs. 50 lakh to Rs. 1 Crore30% 3% on Income Tax + 10% Surcharge on Income Tax
More than Rs. 1 Crore30%3% on Income Tax + 15% Surcharge on Income Tax

Income Tax Slab Rates for Corporate entities (FY 2017-2018)

Income Tax SlabsTax ImpliedHealth and Education Cess
Domestic Companies
a. Total Income < 1 Crore30%3% on Income Tax
b. 1 Crore < Total Income but < 10 Crore30%3% on Income Tax + 7% Surcharge on Income Tax
c. Others30%3% on Income Tax + 12% Surcharge on Income Tax
Foreign Companies
a. Total Income < 1 Crore40%3% on Income Tax
b. 1 Crore < Total Income but < 10 Crore40%3% on Income Tax + 2% Surcharge on Income Tax
c. Others40%3% on Income Tax + 5% Surcharge on Income Tax

*For domestic companies the tax rate applicable is 25% if the turnover is less than Rupees 50 Crore.

For identifying in which slab rate a person falls Net income must be considered which is computed after deducting all the deductions and exemptions.

Additional read: How to Calculate Income Tax for FY 2017-2018?

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