Proposed reduction of the income tax rate from 10 per cent to 5 per cent in the lowest income tax slab of Rs 2,50,000 – Rs 5,00,000.
No changes in the tax rates for higher income of more than Rs 5 lakh.
The government has reduced Rebate u/s 87A to Rs 2,500 (from the existing Rs 5,000). Earlier, Rs 5,000 Rebate was applicable for an individual with total income less than Rs 5 lakh. Now, the Rebate is Rs 2,500 applicable for individual with total income less than Rs 3.5 lakh.
The total income of an individual is gross income minus any deduction u/s 80C to u/s 80U.
Earlier the surcharge of 15 per cent was applicable to those whose income is over and above Rs1 crore. However, now if your income exceeds Rs 50 lakh but below Rs 1 crore then you have to pay 10 per cent tax. Therefore, now the surcharges are as below for super rich individuals.
If the total income exceeds Rs 50 lakh but below Rs1 crore, a surcharge of 10 per cent will be levied.
15 per cent surcharge on income tax if the total income is over and above Rs1 crore.