Budget – 2014 has proposed the following income tax rates
For Individuals below 60 years age (including Woman Assessees):
|
Income |
Tax Rate |
|
Upto 2,50,000 |
Nil |
|
250,000 to 5,00,000 |
10% of the amount exceeding 250,000 |
|
500,000 to 10,00,000 |
Rs.25,000 + 20% of the amount exceeding 5,00,000 |
|
10,00,000 & above |
Rs.1,25,000 + 30% of the amount exceeding 10,00,000 |
For Individuals aged 60 years and above but below 80 years (Senior Citizen):
|
Income |
Tax Rate |
|
Upto 3,00,000 |
Nil |
|
3,00,000 to 5,00,000 |
10% of the amount exceeding 3,00,000 |
|
5,00,000 to 10,00,000 |
Rs.20,000 + 20% of the amount exceeding 5,00,000 |
|
10,00,000 & above |
Rs.1,20,000 + 30% of the amount exceeding 10,00,000 |
For Individuals aged 80 years and above (Very Senior Citizen):
|
Income |
Tax Rate |
|
Upto 5,00,000 |
Nil |
|
5,00,000 to 10,00,000 |
20% of the amount exceeding 5,00,000 |
|
10,00,000 & above |
Rs.1,00,000 + 30% of the amount exceeding 10,00,000 |
Plus 3% education cess on the tax calculated as above. Further, limit to get deduction under section 80C is increased to Rs. 1,50,000/- from Rs. 1,00,000/-
Now, we will study certain income scenarios based on above mentioned budget proposals.
|
Person with Age of less than 60 years |
||||
|
scenario - 1 |
scenario - 2 |
scenario - 3 |
scenario - 4 |
|
|
Gross Total Income |
2,70,000 |
3,70,000 |
4,20,000 |
4,20,000 |
|
Less:Deductions u/s. 80C |
0 |
1,00,000 |
1,00,000 |
1,50,000 |
|
Taxable Income |
2,70,000 |
2,70,000 |
3,20,000 |
2,70,000 |
|
Tax on above income |
2,000 |
2,000 |
7,000 |
2,000 |
|
Less: Rebate u/s 87A |
2,000 |
2,000 |
2,000 |
2,000 |
|
Tax after Rebate |
0 |
0 |
5,000 |
0 |
|
Add: Education Cess 3% |
0 |
0 |
150 |
0 |
|
Total Tax Liability |
0 |
0 |
5,150 |
0 |
|
Person with Age of 60 years or more but less than 80 years |
||||
|
scenario - 1 |
scenario - 2 |
scenario - 3 |
scenario - 4 |
|
|
Gross Total Income |
3,20,000 |
4,20,000 |
4,70,000 |
4,70,000 |
|
Less:Deductions u/s. 80C |
0 |
1,00,000 |
1,00,000 |
1,50,000 |
|
Taxable Income |
3,20,000 |
3,20,000 |
3,70,000 |
3,20,000 |
|
Tax on above income |
2,000 |
2,000 |
7,000 |
2,000 |
|
Less: Rebate u/s 87A |
2,000 |
2,000 |
2,000 |
2,000 |
|
Tax after Rebate |
0 |
0 |
5,000 |
0 |
|
Add: Education Cess 3% |
0 |
0 |
150 |
0 |
|
Total Tax Liability |
0 |
0 |
5,150 |
0 |
|
Person with Age of 80 years or more |
||||
|
scenario - 1 |
scenario - 2 |
scenario - 3 |
scenario - 4 |
|
|
Gross Total Income |
5,00,000 |
5,10,000 |
6,10,000 |
6,60,000 |
|
Less:Deductions u/s. 80C |
0 |
0 |
1,00,000 |
1,50,000 |
|
Taxable Income |
5,00,000 |
5,10,000 |
5,10,000 |
5,10,000 |
|
Tax on above income |
0 |
2,000 |
2,000 |
2,000 |
|
Less: Rebate u/s 87A |
0 |
0 |
0 |
0 |
|
Tax after Rebate |
0 |
2,000 |
2,000 |
2,000 |
|
Add: Education Cess 3% |
0 |
60 |
60 |
60 |
|
Total Tax Liability |
0 |
2,060 |
2,060 |
2,060 |
To calculate the tax for other scenarios, you may use the tax calculator.
Author:
CA. Tejas K. Andharia
B. COM, F.C.A., D.I.S.A.(ICAI), D.I.R.M.(ICAI)
Bhavnagar, Gujarat
Email: tejasinvites@gmail.com
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