Understanding Taxes

Income Tax Slab - FY 2013-2014 / AY 2014-15

Tax slabs for FY 2008-09

Tax slabs for FY 2009-10

Tax slabs for FY 2010-11

Tax slabs for FY 2011-12

Tax slabs for FY 2012-13

When calculating the income tax liability each year, the first and foremost aspect which comes across one’s mind is the tax slabs. In this year’s annual budget, the government has not brought about great relief for the common man by keeping these tax slabs same as the previous years. Here is a look into the slabs for the current financial year to help you prepare your investments and income, and to be able to do income tax filing accurately in the following assessment year.

 

(Also see: How to check income tax refund status online?)

 

Basic Tax Jargons

Financial Year, Assessment Year and Previous Year, do these commonly used income tax jargons often confuse you? This is what they mean.

 

  1. Financial Year (FY) – Duration of one year between 1st April to 31st March of the following year, in which all financial information are reported. The current financial year is 1st April 2013 to 31st March 2014.
  2. Assessment Year (AY) – The income of a particular financial year is assessed in the following financial year, which is known as the assessment year. For the current financial year, income will be assessed in the assessment year 2014-2015.
  3. Previous Year (PY) – The financial year preceding the assessment year, the income of which is assessed in the following assessment year. Assessment year 2014-2015 will assess income for previous year 2013-2014.

 

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Income Tax Slabs

 With no change in the tax slabs, there would not be any greater savings for the consumers. Basic tax exemption limits have been retained; however, the brackets have been broadened. Below are the income tax rates and slabs applicable for the current financial year 2013-14 and assessment year 2014-15.

Tax Slabs for Male/Female Assessee (less than 60 years)

Income : up to 2 lakhs

No Tax

Income : 2 lakhs to 5 lakhs

10 %

Income : 5 lakhs to 10 lakhs

20 %

Income : above 10 lakhs

30 %

 

 

        

 

   

Tax Slabs for Senior Citizen (60 to 80 years)

Income : up to 2.5 lakhs

No Tax

Income : 2.5 lakhs to 5 lakhs

10 %

Income : 5 lakhs to 10 lakhs

20 %

Income : above 10 lakhs

30 %

 

 

Tax slabs for Super Senior Citizen   (> 80 years)

Income : up to 5 lakhs

No Tax

Income : 5 lakhs to 10 lakhs

20 %

Income : above 10 lakhs

30 %

 

 

However, the government has introduced a tax credit of Rs 2,000 for people with an income up to Rs 5,00,000.

 If you are looking for Income tax slabs for FY 2012-13 which was announced in budget 2012, click here.

 

(Also see: Why should you file your income tax return?) 

 

5 Easy Steps to Calculate your Tax

Calculating income tax is not any rocket science. The following 5 steps give you an idea of the process.

           

  1. Calculate your gross total income. This includes gross income from Form 16; and the taxable income from other sources.
  2. Calculate your net deductions, which may include, donations, investments and savings such as provident fund subscriptions, Life Insurance Premiums etc.
  3. Your net taxable income is gross total income minus net deductions.
  4. Apply the appropriate income tax slab to calculate your tax payable on aggregate income.
  5. Education Cess of 3% is applied on the tax payable to arrive at the total tax payable. Relief under various sections would be applied on this total tax.

               

For example: Let us consider a net taxable income of Ravi as Rs. 8, 00,000.

As an assessee, here’s how his tax is calculated.

 

Calculation

 

Tax up to Rs. 2,00,000

Nil

Tax on Rs.2,00,000 to Rs.5,00,000 @ 10%

30,000

Tax on Rs. 5,00,000 to Rs. 8,00,000 @ 20%

60,000

Total

90,000

Educational Cess - 3% of Total Tax

2,700

Net Tax Payable

92,700

 

                                       

Find out your tax liability in less than 30 seconds using this tax calculator.

                   

Want to know if you are saving and investing wisely? Use this Calculator and find out.

Click here to use other such calculators.

                                       

                                                  

Useful Tax Saving Articles

Section 80C

7 Tax Saving Strategies for Salaried Individuals

6 Tax Saving Tips for Working Couples

Tax Planning

Best Tax Saving Mutual Funds

National Savings Certificates (NSC)

Post Office Monthly Income Scheme

 

For any queries, write to expert@investmentyogi.com

 

Published Apr 25 2013




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