Minimum tax payable by senior citizen is Rs 2575

Mukesh Kuriyal | Last updated: 02 March 2019

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MINIMUM TAX PAYABLE TO SENIOR CITIZENS FOR FIN YEAR 2017-18 WAS RS 2575 SO WHETHER THIS WILL CREATE REVENUE LOSS OR BENEFIT

WHY WAS SENIOR CITIZEN FORCED TO PAY MIN TAX OF RS 2575

The Tax Slab For Senior Citizens Fixed By Ministry Of Finance Govt Of India For AY 2018-19 Was As Follows:

S No	Income	Tax Payable
1	Upto 3,00,000/-	Nil Tax
2	Upto 3,50,000/-	Nil Tax [5% Of 50000=2500-2500 Rebate U/s 87A If Income Is Upto 3,50,000]
3	Above 3,50,000	Min tax 2575 [Suppose The Income Is 3,50,005 Then 5% Of 50005= 2500 + Education Cess Of 3%=75 So The Min. Tax Is 2575/-]

Bounding To Pay Min Tax Of Rs 2575/- By The Govt Created Confusion In Senior Citizens
They Preferred Either Not To File The ITR Or File Below Taxable ITR.
Earlier This Was Not The Scene They Had An Option Of Paying The Tax From Rs 100 Upto Any Amount So Generally They Would File Taxable Return By Paying 500 Or 1000 According To Their Pockets.
That Resulted In Adding Tax Revenue.

Now Lets Make A Look At Chart Of CBDT For Fin Year 2017-18

From The Above Chart Issued By CBDT In Their Website Individuals Who Filed ITR Showing Income Upto 5 Lakh Will Follow In The category Of Individuals->Range 1.
According To The Above Data The People Who Filed ITR In The Above Mentioned Category Is 2,34,75,774.

Now From The Above Chart The No Of People Who Filed ITR1 Means Salary/Pensioners(This Includes Individuals Who Are Senior Citizen/Pensioners) Is 2,08,52,946.
This Means That The Individuals Who Filed ITR’s Other Then ITR1 And Showing Income Upto 5,00,000 Are 26,22,828[2,34,75,774-2,08,52,946]
Now Lets Assume Half Of Them To Be Senior Citizens Which Comes Out To Be 13,11,414[50% Of 26,22,828].
Suppose All Of Them Paid Min Tax Of Rs 2575/- So The Revenue This Year Should be Increased By 3,37,68,91,050[2575*13,11,414]
This Means That In Fin Year 2017-18 Minimum Of Appr 338.00 Crore Rupees Revenue Increased By Only Those Senior Citizens Who Showed Income Upto 5 Lakh & Does Not Fall Under Category Of Pensioners.
Now Suppose Senior Citizens Filed The ITR Below Taxable Since The Min Tax payable Was 2575/- So The Govt By Not Implementing Tax Slab Properly Suffered A Min Loss Of Appr. 132 Crore [Assuming Min Tax Paid Was Rs 500 i.e. 1000*13,11,414=1,31,14,14,000]

(These Views Are My Own And Based On The Data Collected From The Income Tax Website)