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

The Logical Indian

February 1st, 2017

Image Source: freepressjournal

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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