FORM 16 PART-B

Form-16 Part B / Annexure / Salary Statement

When you fill your I-T Return, you need to enter the following details.

1 Taxable Salary

3 Aggregate of Section 80C Deductions

(Gross & Deductible Amount)

5 Tax Payable or Refund Due

2 Breakup of Section 80C Deductions

4 TDS (Tax Deducted at Source)

FORM 16 PART-A

Form-16 Part A / Traces Form-16

When you fill your I-T Return, you need to enter the following details.

1 TDS Deducted by Employer

3 PAN of Employer

5 Current Assessment Year

7 Your PAN

2 TAN of Employer

4 Name and Address of Employer

6 Your (Taxpayer's) Name and Address

Understanding Form-16

What is Form 16?

Income Tax Form 16 is a certificate from your employer. It certifies that TDS has been deducted on your salary by the employer. If an employer deducts TDS on salary, he must issue income tax Form 16 as per tax rules of India. Form no 16 is issued once in a year, on or before 31st May of the next year immediately following the financial year in which tax is deducted.

One of the most important income tax form is Form 16. It contain most of the information you need to prepare your income tax return in India. Form 16 has two parts Part A and Part B.

Form 16 Part A has

• Name and address of the employer
• TAN & PAN of employer
• PAN of the employee
• Summary of tax deducted & deposited quarterly, which is certified by the employer
• Assessment Year
• Period of employment with the employer
• Form 16 Part A must be generated and downloaded through Traces portal
• Part A of the Form 16 also has a unique TDS Certificate Number.

Form 16 Part B has

• Detailed breakup of salary paid
• Deductions allowed under the income tax act (under chapter VIA)
• Relief under section 89
• If you have held more than one job during the year, you’ll have more than one Form 16.
• Part B is prepared by the employer manually and issued along with Part A. (Are you an employer? If you are an employer, file your TDS Return here) 

How is tax exemption from HRA calculated?

The deduction available is the minimum of the following amounts:

• Actual HRA received
• 50% of [Basic salary + DA] for those living in metro cities (40% for non-metros)
• Actual rent paid less 10% of salary

GIST OF VARIOUS INCOME TAX SECTION 80 DEDUCTION TABLE

Section	Deduction on	FY 2015-16
Section 80C	Investment in PPF Employee's share of PF contribution NSCs Life Insurance Premium payment Children's Tuition Fee Principal Repayment of home loan Investment in Sukanya Samridhi Account ULIPS ELSS Sum paid to purchase deferred annuity Five year deposit scheme Senior Citizens savings scheme Subscription to notified securities/notified deposits scheme Contribution to notified Pension Fund set up by Mutual Fund or UTI. Subscription to Home Loan Account Scheme of the National Housing Bank Subscription to deposit scheme of a public sector or company engaged in providing housing finance Contribution to notified annuity Plan of LIC Subscription to equity shares/ debentures of an approved eligible issue Subscription to notified bonds of NABARD	Rs. 1,50,000
80CC	For amount deposited in annuity plan of LIC or any other insurer for pension from a fund referred to in Section 10(23AAB).	-
80CCD(1)	Employee's contribution to NPS account (maximum up to Rs 1,00,000 for FY 2014-15)	-
80CCD(2)	Employer's contribution to NPS account	Maximum up to 10% of salary
80CCD(1B)	Additional contribution to NPS	Rs. 50,000
80TTA(1)	Interest Income from Savings account	Maximum up to 10,000
80GG	For rent paid when HRA is not received from employer	Least of rent paid minus 10% of total income Rs. 2000/- per month 25% of total income
80E	Interest on education loan	Interest paid for a period of 8 years
80EE	Interest on home loan for first time home owners	Nil
80CCG	Rajiv Gandhi Equity Scheme for investments in Equities	Lower of - 50% of amount invested in equity shares or Rs 25,000
80D	Medical Insurance - Self, spouse, children  Medical Insurance - Parents more than 60 years old or (from FY 2015-16) uninsured parents more than 80 years old	Rs. 25,000 Rs. 30,000
80DD	Medical treatment for handicapped dependant or payment to specified scheme for maintenance of handicapped dependant Disability is 40% or more but less than 80% Disability is 80% or more	Rs. 75,000 Rs. 1,25,000
80DDB	Medical Expenditure on Self or Dependent Relative for diseases specified in Rule 11DD For less than 60 years old For more than 60 years old For more than 80 years old	Lower of Rs 40,000 or the amount actually paid Lower of Rs 60,000 or the amount actually paid Lower of Rs 80,000 or the amount actually paid
80U	Self suffering from disability: Individual suffering from a physical disability (including blindness) or mental retardation. Individual suffering from severe disability	Rs. 75,000 Rs. 1,25,000
80GGB	Contribution by companies to political parties	Amount contributed (not allowed in cash)
80GGC	Contribution by individuals to political parties	Amount contributed (not allowed in cash)
80RRB	Deductions on Income by way of Royalty of a Patent	Lower of Rs 3,00,000 or income received

BENEFITS ON DIFFERENT SECTIONS OF INCOME TAX RULLINGS

A new section 80C was introduced (replacing section 88) from the financial year 2005-06.  Under this Section, a deduction of upto Rs.1,50,000/- (wef FY 2014-15)  is allowed from Taxable Income in respect of the investments made in some specified schemes.   The schemes are  similar as were available in Section 88 earlier.  Now there are no sectoral caps and individuals can save in any of the schemes upto Rs.1,50,000/- (now even in PPF it is allowed upto Rs. 1.50 lac as against only Rs.1 lakh upto March 2014)..  The tax payers can plan their investments / savings so as to achieve their financial goals.   The details of such schemes along with some major features of each of these are given below : -


1. NSC(NATIONAL SAVING CERTIFICATES) IN POST OFFICES
2. PPF IN POST OFFICES OR BANKS  (UPTO 1.5 LACS) INTEREST IS TAX FREE
3. EPF (EMPLOYEE PROVIDENT FUND) UPTO 1.5 LACS INT IS TAX FREE
3. TAX SAVING FDs IN BANKS OR 5 YEAR TERM DEPOSIT IN POST OFFICES
4. NATIONAL PENSION SYSTEM 80 C-150000 AND 80 CCD ABOVE 1.5 LACS- 50000
5. SUKANYA SAMRUDHI YOJANA IN POST OFFICES OR BANKS (INT IS TAX FREE)
6. SCSS(SENIOR CITIZEN SAVING SCHEME) UPTO 1.5 LACS
7. UNIT LINKED INSURANCE POLICES AND POSTAL LIFE INSURANCE, RURAL POST LIFE INSURANCE, SOME OF POLICES OF PRIVATE SECTOR AND PUBLIC SECTOR INSURANCE COMPANIES
8. CHILDREN'S TUITION FEES
9. REPAYMENT OF HOME LOAN

 These are the benefits you are getting under 80-c beyond to this you will also get benefit under

Section 80CCC: Deduction for Premium Paid for Annuity Plan of LIC or Other Insurer

This section provides deduction to an Individual for any amount paid or deposited in any annuity plan of LIC or any other insurer. The plan must be for receiving pension from a fund referred to in Section 10(23AAB).

If the annuity is surrendered before the date of its maturity, the surrender value is taxable in the year of receipt.

Section 80CCD: Deduction for Contribution to Pension Account

Employee's contribution – Section 80CCD(1) Allowed to an Individual who makes deposits to his/her Pension account. Maximum deduction allowed is 10% of salary (in case of taxpayer being an employee) or 10% of gross total income (in case of tax payer being self-employed) or Rs 1,00,000 whichever is less. The limit of Rs 1,00,000 has been increased to Rs 1,50,000 starting financial year 2015-16 (assessment year 2016-17).

Deduction for self contribution to NPS - section 80CCD(1B) A new section 80CCD(1B) has been introduced for additional deduction for amount deposited by a taxpayer to their NPS account . Contributions to Atal Pension Yojana are also eligible. Deduction is allowed on contribution up to Rs 50,000.

Employer's contribution – Section 80CCD(2) Deduction is allowed for employer's contribution to employee’s pension account up to 10% of the salary of the employee. There is no monetary ceiling on this deduction.

Deductions on Interest on Savings Account

Section 80 TTA: Deduction from gross total income for Interest on Savings bank account

A deduction of maximum Rs 10,000 can be claimed against interest income from a savings bank account. Interest from savings bank account should be first included in other income and deduction can be claimed of the total interest earned or Rs 10,000, whichever is less. This deduction is allowed to an individual or HUF. And it can be claimed for interest on deposits in savings account with a bank, co-operative society or post office. Section 80TTA deduction is not available on interest income from fixed deposits or recurring deposits or interest income from corporate bonds.

Deductions on House Rent

Section 80GG: Deduction for House Rent Paid where HRA is not received

• This deduction is available for rent paid when HRA is not received. Taxpayer or his spouse or minor child should not own residential accommodation at the place of employment.
• Taxpayer should not have self-occupied residential property in any other place.
• Taxpayer must be living on rent and paying rent.

Deduction available is the minimum of

1. Rent paid minus 10% of total income
2. Rs. 2000/- per month
3. 25% of total income

For Financial year 2016-17 – For calculating deduction above, Rs 2,000 per month has been raised to Rs 5,000 per month. Therefore a maximum of Rs 60,000 per annum can be claimed as a deduction.

Deductions on Education Loan for Higher Studies

Section 80E: Deduction for Interest on Education Loan for Higher Studies

Deduction is allowed for interest on loan taken for pursuing higher education. This loan may have been taken for the taxpayer, spouse or children or for a student for whom the taxpayer is a legal guardian. The deduction is available for a maximum of 8 years or till the interest is paid, whichever is earlier. There is no restriction on the amount that can be claimed.

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Deduction for First Time Home Owners

Section 80EE: Deductions on Home Loan Interest for First Time Home Owners
For Financial Year 2013-14 and Financial Year 2014-15

This section provided deduction on the Home Loan Interest paid. The deduction under this section is available only to Individuals for first house purchased where the value of the house is Rs 40lakhs or less and loan taken for the house is Rs 25lakhs or less. And the Loan has been sanctioned between 01.04.2013 to 31.03.2014. The aggregate deduction allowed under this section cannot exceed Rs 1,00,000 and is allowed for financial years 2013-14 & 2014-15 (Assessment year 2014-15 and 2015-16).

This deduction is not available for financial year 2015-16 (assessment year 2016-17).

For Financial Year 2016-17

This section was revived in Budget 2016 and is applicable starting FY 2016-17. The deduction under this section is available only to an Individual who is a first time home owner. The value of the property purchased must be less than Rs 50 Lakhs and home loan must be less than Rs 35 lakhs. And the Loan must be taken from a financial institution and must be sanctioned between 01.04.2016 to 31.03.2017. Under this section, an additional deduction of Rs 50,000 can be claimed on home loan interest. This is in addition to deduction of Rs 2,00,000 allowed under section 24 of the income tax act for a self-occupied house property. There is no restriction on the number of years for which this deduction can be claimed.

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Deductions on Rajiv Gandhi Equity Saving Scheme (RGESS)

Section 80CCG: Rajiv Gandhi Equity Saving Scheme (RGESS)

The Rajiv Gandhi Equity Saving Scheme (RGESS) was launched after the 2012 Budget. Investors whose gross total income is less than Rs. 12 lakhs can invest in this scheme. Upon fulfilment of conditions laid down in the section, the deduction is lower of, 50% of amount invested in equity shares or Rs 25,000.

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Deductions on Medical Insurance

Section 80D: Deduction for premium paid for Medical Insurance

For financial year 2014-15 - Deduction is available up to Rs. 15,000/- to a taxpayer for insurance of self, spouse and dependent children. If individual or spouse is more than 60 years old the deduction available is Rs 20,000. An additional deduction for insurance of parents (father or mother or both) is available to the extent of Rs. 15,000/- if less than 60 years old and Rs 20,000 if parents are more than 60 years old. Therefore, the maximum deduction available under this section is to the extent of Rs. 40,000/-. (From AY 2013-14, within the existing limit a deduction of up to Rs. 5,000 for preventive health check-up is available).

For financial year 2015-16– Deduction is raised from Rs 15,000 to Rs 25,000. The deduction for senior citizens is raised from Rs 20,000 to Rs 30,000. For uninsured super senior citizens (more than 80 years old) medical expenditure incurred up to Rs 30,000 shall be allowed as a deduction under section 80D. However, total deduction for health insurance premium and medical expenses for parents shall be limited to Rs 30,000.

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Deductions on Medical Expenditure for a Handicapped Relative

Section 80DD: Deduction for Rehabilitation of Handicapped Dependent Relative

Deduction is available on:

1. Expenditure incurred on medical treatment, (including nursing), training and rehabilitation of handicapped dependent relative
2. Payment or deposit to specified scheme for maintenance of dependent handicapped relative.

Where disability is 40% or more but less than 80% - fixed deduction of Rs 50,000.

Where there is severe disability (disability is 80% or more) – fixed deduction of Rs 1,00,000.A certificate of disability is required from prescribed medical authority.

Note: A person with 'severe disability' means a person with 80% or more of one or more disabilities as outlined in section 56(4) of the 'Persons with disabilities (Equal opportunities, protection of rights and full participation)' Act.

• Certificate can be taken from a Specialist as specified.
• Patients getting treated in a private hospital are not required to take the certificate from a government hospital.
• Patients receiving treatment in a government hospital have to take certificate from any specialist working full-time in that hospital. Such specialist must have a post-graduate degree in General or Internal Medicine or any equivalent degree, which is recognised by the Medical Council of India.
• Certificate in Form 10I is no longer required. The certificate must have - name and age of the patient, name of the disease or ailment, name, address, registration number and the qualification of the specialist issuing the prescription. If the patient is receiving the treatment in a Government hospital, it should also have name and address of the Government hospital.

For financial year 2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs 1,25,000.

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Deductions on Medical Expenditure on Self or Dependent Relative

Section 80DDB: Deduction for Medical Expenditure on Self or Dependent Relative

A deduction Rs. 40,000/- or the amount actually paid, whichever is less is available for expenditure actually incurred by resident taxpayer on himself or dependent relative for medical treatment of specified disease or ailment.

The diseases have been specified in Rule 11DD. A certificate in form 10 I is to be furnished by the taxpayer from any Registered Doctor.

In case of senior citizen the deduction can be claimed up to Rs 60,000 or amount actually paid, whichever is less.

For financial year 2015-16 – for very senior citizens Rs 80,000 is the maximum deduction that can be claimed.

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Deductions for Person suffering from Physical Disability

Section 80U: Deduction for Person suffering from Physical Disability

Deduction of Rs. 50,000/- to an individual who suffers from a physical disability (including blindness) or mental retardation. In case of severe disability, deduction of Rs. 100,000 can be claimed. Certificate should be obtained from a Govt. Doctor. The relevant rule is Rule 11D. This is a fixed deduction and not based on bills or expenses.

For financial year 2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs 1,25,000.

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Deduction for donations towards Social Causes

Section 80G: Deduction for donations towards Social Causes

The various donations specified in Sec. 80G are eligible for deduction up to either 100% or 50% with or without restriction as provided in Sec. 80G. 80G deduction not applicable in case donation is done in form of cash for amount over Rs 10,000.

Donations with 100% deduction without any qualifying limit:

• National Defence Fund set up by the Central Government
• Prime Minister's National Relief Fund
• National Foundation for Communal Harmony
• An approved university/educational institution of National eminence
• Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
• Fund set up by a State Government for the medical relief to the poor
• National Illness Assistance Fund
• National Blood Transfusion Council or to any State Blood Transfusion Council
• National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
• National Sports Fund
• National Cultural Fund
• Fund for Technology Development and Application
• National Children's Fund
• Chief Minister's Relief Fund or Lieutenant Governor's Relief Fund with respect to any State or Union Territory
• The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister's Cyclone Relief Fund, 1996
• The Maharashtra Chief Minister's Relief Fund during October 1, 1993 and October 6,1993
• Chief Minister's Earthquake Relief Fund, Maharashtra
• Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
• Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat (contribution made during January 26, 2001 and September 30, 2001) or
• Prime Minister's Armenia Earthquake Relief Fund
• Africa (Public Contributions — India) Fund
• Swachh Bharat Kosh (applicable from financial year 2014-15)
• Clean Ganga Fund (applicable from financial year 2014-15)
• National Fund for Control of Drug Abuse (applicable from financial year 2015-16)

Donations with 50% deduction without any qualifying limit.

• Jawaharlal Nehru Memorial Fund
• Prime Minister's Drought Relief Fund
• Indira Gandhi Memorial Trust
• The Rajiv Gandhi Foundation

Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income

• Government or any approved local authority, institution or association to be utilised for the purpose of promoting family planning
• Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India.

Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income

• Any other fund or any institution which satisfies conditions mentioned in Section 80G(5)
• Government or any local authority to be utilised for any charitable purpose other than the purpose of promoting family planning
• Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both
• Any corporation referred in Section 10(26BB) for promoting interest of minority community
• For repairs or renovation of any notified temple, mosque, gurudwara, church or other place.

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Deductions on Contribution by Companies to Political Parties

Section 80GGB: Deduction on contributions given by companies to Political Parties

Deduction is allowed to an Indian company for amount contributed by it to any political party or an electoral trust. Deduction is allowed for contribution done by any way other than cash.

Political party means any political party registered under section 29A of the Representation of the People Act. Contribution is defined as per section 293A of the Companies Act, 1956.

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Deductions on Contribution by Individuals to Political Parties

Section 80GGC: Deduction on contributions given by any person to Political Parties

Deduction is allowed to a taxpayer for any amount contributed to any political party or an electoral trust. Deduction is allowed for contribution done by any way other than cash.

Political party means any political party registered under section 29A of the Representation of the People Act.

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Deductions on Income by way of Royalty of a Patent

Section 80RRB: Deduction with respect to any Income by way of Royalty of a Patent

Deduction for any income by way of royalty for a patent registered on or after 01.04.2003 under the Patents Act 1970 shall be available up to Rs. 3 lakhs or the income received, whichever is less. The taxpayer must be an individual resident of India who is a patentee. The taxpayer must furnish a certificate in the prescribed form duly signed by the prescribed authority.

RULINGS FOR FILLING INCOME TAX

1. Filing of income tax is compulsory for all individuals whose gross annual income exceeds the maximum amount which is not chargeable to income tax (e.g. Rs.3,00,000 for Senior citizens, Rs.2,50,000/- for resident individuals)

2. The last date for filing of income tax return is usually July 31 for individuals (sometimes the same is extended).

3. Consequences for non-filing income tax return: (i) You will be issued notice u/s 142(1) for non-filing of income tax return if the income tax dept. (ii) Losses if any during the year, would not be allowed to carry forward. Normally, if you file your return on time losses of this year can be set-off against gain of forthcoming years. (iii) A Penalty of Rs. 5,000/- may be imposed under section 271F if belated return is submitted. (iv) Interest u/s 234A at the rate of 1% per month/part of the month would be charged.

BUDGET CHANGES FOR INCOME TAX IN 2015-2016, 16-17,

Particulars	Provisions for FY 2014-15OR AY 2015-16	Changes as per Budget for FY 2015-16 OR AY 2016-17	Changes as per Budget for FY 2016-17 OR AY 2017-18
Surcharge on taxable income exceeding Rs. 1 Crore for Individuals, Senior Citizens, Very Senior Citizens, HUFs, AOPs, BOIs, artificial juridical persons, firms, cooperative societies and local authorities	10% of Income Tax	12% of Income Tax	15% of Income Tax
Comparison of Benefits under various IT Sections
Exempted amount of transport allowance	Rs. 800/- per month	Rs. 1,600/- per month	Rs. 1,600/- per month
Section 80D - Deduction for Health  Insurance premium	Rs. 15,000/-	Rs. 25,000/-	Rs. 25,000/-
Section 80D - Deduction for Health  Insurance premium for Senior Citizens	Rs. 20,000/-	Rs. 30,000/-	Rs. 30,000/-
Investment in Sukanya Samriddhi Scheme	-	Eligible for deduction u/s 80C and any payment from the scheme shall not be liable to tax.	Eligible for deduction u/s 80C and any payment from the scheme shall not be liable to tax.
Section 80DDB - Deduction in case of very senior citizens (>80 years) on expenditure on account of specified diseases	Rs. 60,000/-	Rs. 80,000/-	Rs. 80,000/-
Section 80DDB - Deduction in case of expenditure on account of specified diseases	Rs. 40,000/- (<60 years)Rs. 60,000/- (>60 years)	Rs. 40,000/- (<60 years)Rs. 60,000/- (>60 years)	Rs. 40,000/- (<60 years)Rs. 60,000/- (>60 years)
Section 80DD - Maintenance, including medical treatment of a dependent who is a person with disability	Rs. 50,000/-	Rs. 75,000/-	Rs. 75,000/-
Section 80DD - Maintenance, including medical treatment of a dependent who is a person with severe disability	Rs. 1,00,000/-	Rs. 1,25,000/-	Rs. 1,25,000/-
Section 80U - Person with disability	Rs. 50,000/-	Rs. 75,000/-	Rs. 75,000/-
Section 80U - Person with severe disability	Rs. 1,00,000/-	Rs. 1,25,000/-	Rs. 1,25,000/-
Section 80CCC - Contribution to provident fund of LIC or IRDA approved insurer	Rs. 1,00,000/-	Rs. 1,50,000/-	Rs. 1,50,000/-
Section 80CCD - Contribution by the employee to National Pension Scheme (NPS)	Rs. 1,00,000/-	Rs. 1,50,000/- Now under Section 80CCD, a deduction of upto Rs. 50,000  is allowed over and above the limit of Rs. 1.50 lakh under Section 80C  in respect of contributions made to NPS is also allowed.   Thus, now the total deduction that can be claimed under Section 80C+Section 80CCD = Rs 2 lakh. In case any employer contributes to the NPS scheme on behalf of the employee and the benefit of the same would be availed by the employee, the employee would also be allowed a deduction under Section 80CCD(2) for the amount of contribution made by the employer.	Rs. 1,50,000/- Now under Section 80CCD, a deduction of upto Rs. 50,000  is allowed over and above the limit of Rs. 1.50 lakh under Section 80C  in respect of contributions made to NPS is also allowed.   Thus, now the total deduction that can be claimed under Section 80C+Section 80CCD = Rs 2 lakh. In case any employer contributes to the NPS scheme on behalf of the employee and the benefit of the same would be availed by the employee, the employee would also be allowed a deduction under Section 80CCD(2) for the amount of contribution made by the employer.

INCOME TAX CHANGES IN BUDGET 2017

General (non-senior citizens) Category	Women (Below 60 years of age) (This category is abolished from this year and is thus is same as that of  General Category	Senior Citizens (Men and Women above 60 years of age), but below 80 years	Very Senior Citizens (Men and Women above 80 years of age)
Upto Rs. 2,50,000	Nil	Nil	Nil	Nil
Rs. 2,50,001 to Rs. 3,00,000	10% *	10% *	Nil	Nil
Rs. 3,00,001 to Rs. 5,00,000	10% *	10% *	10% *	Nil
Rs. 5,00,001 to Rs. 10,00,000	20%	20%	20%	20%
Above Rs. 10,00,000	30% **	30% **	30% **	30%**

Thus, we can say :-

1. The basic exemption limit for individuals (i.e. below 60 years of age) is Rs 2.50 lakhs
2. The basic exemption limit for Senior citizens (60 years to below 80 years) is : Rs 3.00 lakhs
3. The basic exemption limit for Very Senior Citizens(80 years and above)  is Rs3.50 lakhs

* A tax rebate of Rs. 5000 from tax calculated will be available for people having an annual income upto Rs 5 lakh (for FY 2015-16, the tax rebate in this category used to be Rs. 2000). However, this benefit of Rs. 5000 tax credit will not be available if you cross the income range of Rs 5 lakh. Thus we can say that tax payable in 10% slab will be maximum Rs20,000 (taking into account Rs 5000 tax credit), but for people who fall in income range of Rs5 lakh and above, the tax will be Rs25,000 + 20% tax on income above Rs 5 lakh. Due to this provision, those who earn below Rs. 3 lakhs are not required to pay any tax.

** The education cess to continue at 3 percent.

*** The Surcharge @15% for the FY 2016-17 or AS 2017-18 will be payable if the income is above Rs 1 crores).    For the FY 2015-16 it was 12%.

However, some tax relief has been given in FY 2016-17 through the following rebates:

• As mentioned above, the income tax rebate is increased to Rs 5000 for taxable income below Rs. 5 lakhs
• The tax deduction for rent payment (section 80GG) is increased from Rs. 24000 to Rs. 60000. This deduction is available to those, who live in rented house, and do not get House Rent Allowance from their employer.
• First time home buyers can claim an additional Tax deduction of upto Rs. 50,000 on home loan interest payment under section 80EE. This extra deduction of Rs. 50,000 would be available over & above the 80C limit of Rs. 1.5 lakhs. It means that total tax deduction under Section 80C can go upto Rs. 2 lakhs provided atleast Rs 50,000 is paid as home loan interest within the financial year. This extra tax deduction is available to only those homebuyers, who meet ALL the following criteria - (i) who have home loan sanctioned in FY 2016-17 (ii) whose loan amount is less than 35 lakhs (iii) value of house should not be more than Rs. 50 lakhs
• There would be no capital gains tax on redemption of the Sovereign Gold Bond. The long term capital gains arising from transfer of Gold Bond would be eligible for Indexation benefit. The Sovereign Gold bond scheme is launched to discourage the purchase of physical gold for the investment purpose.
• The government would not charge any capital gains tax on the interest income of gold monetization scheme. The gold monetization scheme was launched to channelize the idle household gold
• The 40% withdrawal of NPS (National Pension System) would be exempted from the tax. Along with this the NPS, wealth give to the nominee after the death of the subscriber would be 100% exempt from the tax.
• If an employer invests into the pension fund of an employee, the invested amount is exempt from tax. This year's budget (2016) has increased the exemption limit from Rs. 1 lakh to Rs. 1.5 lakh.