There are reasons to cheer for Tax payers who fall in the bracket of Income - Rs 2.5 Lakh to Rs 5 Lakh in the Financial Year 2017-18. In Union Budget 2017, the government has reduced the tax burden on this group by half viz from 10% Income Tax Slab Rate, Individuals and HUFs (Hindu Undivided Family) in this income slab will pay only 5% Income Tax Slab Rate.
Thereby if someone with annual Income of Rs 5 Lakh had to pay Rs 25,000 as tax, he'll be paying just Rs 12,500 for FY2017-18.
Another group who can relish this good news further is Senior Citizens i.e. Individuals who are over 60 Years of age but less than 80. For them the Income Slab has been raised from Rs 2.5 Lakh to Rs 3 Lakh. That means till Rs 3 Lakh their income from pension, interest, rent or from other sources will be 100% exempted from tax and their new tax slab rate is Rs 3 Lakh to Rs 5 Lakh.
Additionally third group that will further benefit is Super Senior Citizens i.e. Individuals who are over 80 Years Old. For this group, the Income Tax is exempted till Rs 5 Lakh and beyond that it will follow the rules as applicable to everyone else.
Another noteworthy point is 10% Surcharge on income group that falls in the Income Slab: Rs 50 Lakh - Rs 1 Crore (exempting individuals 80 Years+). However, 15% Surcharge on individuals whose taxable income is above Rs 1 Crore remains same.
Lastly Cess of 3% on Income Tax + Surcharge is levied to all groups unanimously.
To Sum Up, let's take a look at the table below which presents who is exempted how much, falls under which Income Tax Slab and Tax Rate in Financial Year 2017-18: