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.