Budget 2017-18: Income Tax Reduced To 5% For Rs 2.5-5 Lakh Slab

Pratham Gharat

February 1, 2017

During his Budget speech, the Finance Minister, Arun Jaitley, proposed revised tax limits.

He announced that income tax rate on those earning between Rs. 2.5 lakh and 5 lakh will be cut by half. They will now be taxed at 5% instead of the current 10%.

Furthermore, there will be a surcharge of 10% for the individuals whose income is between Rs. 50 lakh and Rs. 1 crore.

Mr. Jaitley has opined that this will drive investment and growth.

Highlights:

Tax liability for those with annual income between Rs. 2.5 and 5 lakh at 5% instead of the existing 10%. Surcharge of 10% for those individuals whose annual income is between Rs. 50 lakh and Rs 1 crore. Tax rebate for the slab Rs 2.5-5 Lakh has been reduced to Rs 2500, from Rs 5000. All other income groups will get a uniform benefit of Rs 12,500. Surcharge on the individual annual income of Rs 1 crore or more remains unchanged at 15%. Corporate tax cut for Ministry of Micro, Small and Medium Enterprises (MSMEs), no cash transactions above Rs. 3 lakh. MSMEs with annual turnover upto Rs. 50 crore will have to pay only 25% tax.

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