Budget 2017: Income tax slashed; find out more

Finance Minister Arun Jaitley's Union Budget has surely brought cheer to every tax payer. The Finance Minister on Wednesday announced income tax rate cut to 5% for individuals having income between Rs 2.5 lakh to Rs 5 lakh.  Currently, for the income exceeding Rs 2.5 lakh to Rs 5 lakh is liable for 10% tax.

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This reduction in slab rate to 5% for salary between Rs 2.5 lakh to Rs 5 lakh will result in maximum tax saving of Rs 12,500 for all. 

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For the rest of the tax slab remained unchanged. Which means, the tax rate for the individual earning between Rs 5 lakh to Rs 10 lakh will be liable for 20% tax rate. Also, for the income above Rs 10 lakh, 30% of tax rate will be levied. 

Moreover, in this Budget for the year 2017-18, 10% surcharge will be applicable on individual with income above Rs 50 lakh and upto Rs 1 crore to make up for Rs 15,000 crore loss of due to cut in personal income tax rate.

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However, a surcharge of 15% will be applicable on income above Rs 1 crore to continue.

Commenting on the new tax rates, Archit Gupta, Founder & CEO ClearTax.com, told Zeebiz, "Those who earn upto Rs 5 lakh will either pay no tax or their tax outgo will reduce to 50%. Our exemption limits have stayed put since a long time. Low income earners have been given relief. This is likely to boost consumption and put higher disposable income in the hands of taxpayers."

Other tax related highlight by the Finance Minister under the Budget are:

- Threshold for maintenance of books of accounts for individuals and HUFs turnover limit being increased from 10 lakh to 25 lakh or income limit increase from Rs 1.2 lakh to Rs 2.5 lakh. 

- Threshold limits increase for audit for presumptive businesses from Rs 1 crore to 2 crore. 

-Those companies with turnover under Rs 50 crore now have to pay 25% tax instead of 30%.