Income Tax Slab and Tax Planning for F.Y-2016-17, Assessment Year 2017-18 and Expected Tax slab for financial year 2017-18, Keeping all the burden on government in mind like OROP (16000Crore), 7th Pay Commission(1.2Lakh Crore) etc.

1. Income Tax Planning for
Financial Year-2016-17
Assessment Year-2017-18
131-01-2017 Department of Management Studies RGIPT
Vivek Kumar M1617
“Tax Planning is not a goal but a tool”

2. Income Tax Slab Rate for Individual/HUF:
Tax Slab
For Men/ Women For Senior Citizen For Super Senior Citizen
Below 60 Years of age Age 60 years or more but less than
80 years
Age 80 years or more
Income Level Tax Rate Income Level Tax Rate Income Level Tax Rate
0
Up to
Rs 2,50,000 Nil
Up to
Rs 3,00,000 Nil
Up to
Rs 5,00,000 Nil
I
Rs. 2,50,001-
Rs.5,00,000 10%
Rs. 3,00,001-
Rs.5,00,000 10%
Rs. 5,00,001-
Rs.5,00,000 20%
II
Rs. 5,00,001-
Rs.10,00,000 20%
Rs. 5,00,001-
Rs.10,00,000 20%
Above Rs.
10,00,000 30%
III
Above Rs.
10,00,000 30%
Above Rs.
10,00,000 30%
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3. Various Deduction and their Limit:
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Section 80C
Limit: Rs 1.5Lakh
Section 80D
Limit: Rs 30K/30K
Section 80CCD
(1B)
Limit: Rs 50K
Section 24B
Limit: Rs 2Lakh
Section 80EE
Limit: Rs 50,000
Section 80GG
Limit: Rs 60K
Section 80E
Limit: NA
Section 80TTA
Limit: Rs 10K
Section 16
Limit: NA
Section 87A
Limit: Rs 5K

4. Section 80C investment avenues or expenses:
PPF
EPF
FD (Bank or Post office)
NSC
ELSS Mutual Fund
Children Tuition Fee
Principle repayment of Home Loan
Life Insurance Premium
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5. Section 80CCD (1B)
Employee can contribute to Government notified Pension Schemes
(like National Pension Scheme – NPS).
The contributions can be up to 10% of the salary (or) Gross Income and
Rs 50,000 additional tax benefit u/s 80CCD (1b) was proposed in
Budget 2015.
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6. Section 80D:
Health Insurance Policy Premium Tax benefit
Scenario
Health Insurance Premium paid for & Max. tax
deduction limit
Tax Deduction under
Section 80DSelf, Spouse & Dependent
Children
Parents (whether
dependent or not)
No one in your family
attained 60years of age Up to Rs 25,000 Up to Rs 25,000 Rs 50,000
Only parent are above 60
years of age Up to Rs 25,000 Up to Rs 30,000 Rs 55,000
Eldest member of family
and parent are above
60years of age
Up to Rs 30,000 Up to Rs 30,000 Rs 60,000
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7. Section 24 (B):
• The interest component of home loans is allowed as deduction under
Section 24B for up to Rs 2 lakh in case of a self-occupied house.
• If your property is a let-out one then the entire interest amount can
be claimed as tax deduction
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8. Section 80EE:
• This is a new proposal which has been made in Budget 2016-17. First
time Home Buyers can claim an additional Tax deduction of up to Rs
50,000 on home loan interest payments u/s 80EE. The below criteria
has to be met for claiming tax deduction under section 80EE.
• Loan amount should be less than Rs 35 Lakh.
• The value of the house should not be more than Rs 50 Lakh &
• The home buyer should not have any other existing residential house
in his name.
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9. Section 80GG:
As per the budget 2016 proposal, the Tax Deduction amount
under 80GG has been increased from Rs 24,000 per annum to Rs
60,000 per annum. Section 80GG is applicable for all those individuals
who do not own a residential house.
The extent of tax deduction will be limited to the least amount of the
following;
• Rent paid minus 10 percent the adjusted total income.
• Rs 5,000 per month.
• 25 % of the total income.
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10. Section 80E:
If you take any loan for higher studies (after completing Senior
Secondary Exam), tax deduction can be claimed under Section 80E for
interest that you pay towards your Education Loan. This loan should
have been taken for higher education for you, your spouse or your
children or for a student for whom you are a legal guardian.
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11. Section 80TTA:
Deduction from gross total income of an individual or HUF, up to a
maximum of Rs. 10,000/-, in respect of interest on deposits in savings
account with a bank, co-operative society or post office can be claimed
under this section.
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12. Section 16:
Professional Tax paid during financial either state or central govt. or
both are come under 100% tax deduction.
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13. Section 87A:
If your earning below Rs 5 lakh, you can save additional Rs 5,000 in
taxes. Tax rebate under Section 87A has been raised from Rs 2,000 to
Rs 5,000 for FY 2016-17 (AY 2017-18).
In case if your tax liability is less than Rs 5,000 for FY 2016-17, the
rebate u/s 87A will be restricted up to income tax liability only.
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14. Example:
Income from salary / business or profession / other sources Rs. 7,65,000
Less : Interest on funds borrowed for aquiring the house property Rs. 2,00,000
Gross Total income Rs. 5,65,000
Less : Deduction available under Sec. 80C Rs. 1,50,000
Less : Deduction u/s 80CCD(1B) (Contribution to NPS scheme) Rs. 50,000
Less : Deduction u/s 80D for medical insurance of self, spouse and dependent children Rs. 25,000
Less : Deduction u/s 80D for medical insurance of parents (assumed both are senior
citizens)
Rs. 30,000
Less : Deduction u/s 80TTA for Saving account interest Rs. 10,000
Total Income Rs. 3,00,000
Tax payable Rs. 5,000
Less : Rebate u/s 87A Rs. 5,000
Net Income Tax Liability Nil
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15. Expected Income Tax Slab Rate for
Individual/HUF:
Tax Slab
For Men/ Women For Senior Citizen For Super Senior Citizen
Below 60 Years of age Age 60 years or more but less than
80 years
Age 80 years or more
Income Level Tax Rate Income Level Tax Rate Income Level Tax Rate
0
Up to
Rs 3,00,000 Nil
Up to
Rs 3,50,000 Nil
Up to
Rs 6,00,000 Nil
I
Rs. 3,00,001-
Rs.5,00,000 10%
Rs. 3,50,001-
Rs.5,00,000 10%
Rs. 5,00,001-
Rs.5,00,000 20%
II
Rs. 5,00,001-
Rs.10,00,000 20%
Rs. 5,00,001-
Rs.10,00,000 20%
Above Rs.
10,00,000 30%
III
Above Rs.
10,00,000 30%
Above Rs.
10,00,000 30%
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16. Various Expected Deduction and their Limit:
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Section 80C
Limit: Rs 2Lakh
Section 80D
Limit: Rs 30K/30K
Section 80CCD
(1B)
Limit: Rs 50K
Section 24B
Limit: Rs 2Lakh
Section 80EE
Limit: Rs 50,000
Section 80GG
Limit: Rs 60K
Section 80E
Limit: NA
Section 80TTA
Limit: Rs 10K
Section 16
Limit: NA
Section 87A
Limit: Rs 5K