Sunday, August 21, 2016

Income Tax Slabs

Income tax is a major source of revenue for governments around the world, and the Indian government is no exception. Income taxes, by definition, are collected on income from various sources that an individual may earn during a fiscal year. In India, income tax is controlled by the Central Board of Direct Taxes (CBDT), which in turn falls under the Indian Revenue Services (IRS). IRS is the administrative services arm of the Department of Revenue, Ministry of Finance.

Update from April 2016: Checkout: Income Tax Slabs and Rates for AY: 2016-17
W
ho has to pay income tax?

Income tax is collected on a yearly basis as a percentage of an entity’s income in a fiscal year (April to March). The maximum rate of income tax is capped at 30% in India, though surcharge and educational cess are also applicable, which may increase this upper limit by some percentage. 

Taxpayers are broadly categorized into:

Individuals and Hindu Unified Families (HUF) entities:

Individuals (both male and female) up to the age of 60 years.
Senior citizens above 60 years and up to 80 years of age.
Super senior citizens above 80 years old.
Business Entities
Domestic company, firms and local authority.
Co-operative societies.
Foreign companies.

Income tax rates are levied according to the divisions given above. For the first category of individual taxpayers, the tax slabs and rates are applicable as per following.

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