Income tax slabs for FY 2017-18 and your options for tax saving

Income tax slabs for FY 2017-18 and your options for tax saving

New Delhi: With just over 3 months left for the financial year 2017-18 to end, most of you must have calculated your tax liability for the current year. If you have not yet done that, then don’t wait for the last minute and do it fast. Once you calculate your tax liability then only you can plan your investments to save tax. Income Tax provisions in India allow individual taxpayers to save tax under various sections. However, to take the benefits of these sections you need to plan in advance. Also, salaried employees need to submit their investment proofs to their employers.  Here we present you the income tax slabs applicable for the current year and the options available for saving tax.

Income tax slabs for FY2017-18

General category
(Up to 60 years of age)

Income                              Tax
Up to Rs. 2.5 lakh              Nil
Rs. 2,50,001-Rs. 5 lakh     5.00%
Rs. 500,001-Rs. 10 lakh    20.00%
Above Rs. 10 lakh              30.00%

Senior citizens  
(60-80 years)

Income                              Tax
Up to Rs. 3 lakh                  Nil
Rs. 3,00,001-Rs. 5 lakh      5.00%
Rs. 5,00,001-Rs. 10 lakh    20.00%
Above Rs. 10 lakh              30.00%

Super senior citizens 
(Above 80 years)

Income                               Tax
Up to Rs. 5 lakh                   Nil
Rs. 5,00,001-Rs. 10 lakh     20.00%
Above Rs. 10 lakh               30.00%

A surcharge of 10 per cent will be applicable for income between Rs. 50 lakh and Rs. 1 crore with marginal relief and a surcharge of 15 per cent will be applicable for income above Rs. 1 crore with marginal relief. Marginal relief the relaxation provided to a taxpayer where the total income exceeds marginally above Rs. 50 lakh or Rs. 1 crore, as the case may be. For taxable salary up to Rs 3.50 lakh, you will also get a tax rebate of Rs 2,500.

Below are the 10 Income tax rules that will help you save income tax.  

 1. Tax saving on house rent allowance 

House rent allowance, commonly known as HRA, is a major chunk of a salaried individual’s total pay. Under Section 10 (13A) of the Income Tax Act, you can save tax on the rent you pay to your landlord. However, you get partial tax benefit on the rent you pay. The amount that is allowed for exemption under HRA is calculated as the minimum of:

i) Rent paid annually minus 10 per cent of basic salary plus dearness allowance
ii) Actual HRA received
iii) 40 per cent of basic and dearness allowance (50 per cent in case of metro cities).

Your HRA allowance will be taxable if you are not paying any rent or you stay in your own house. But those who stay with their parents can also claim HRA benefits by paying rent to their parents.

2. Deductions under Section 80C

One can claim tax benefit on investments up to Rs 1.5 lakh under Section 80C of the Income Tax Act. If you fall in the highest tax slab (30 per cent), by investing Rs 1.5 lakh you can save tax for up to Rs 46,350 (including cess charges.) per year. Investments that qualify for tax benefit under this section are Employees’ Provident Fund (EPF), Public Provident Fund (PPF), Sukanya Samriddhi Account, National Savings Certificate and tax-saving fixed deposits. The premium paid for life insurance plans, National Pension Scheme (NPS) and tax-saving mutual funds (ELSS) also qualify for deduction under Section 80C.

One can also claim tuition fees paid for up to two children, principal repayment on home loan, stamp duty and registration cost on the house bought as a deduction under Section 80C.

Read: Save income tax through mutual fund investment. All you need to know

3. Deductions under Section 80CCD(1B)

This section was introduced in Budget 2015-16. Under this section, one can get tax benefits on investments up to Rs 50,000 in NPS tier 1 account. This is over and above the Rs 1.5 lakh limit under Section 80C. An individual in highest tax bracket can save Rs. 15,450 by investing Rs. 50,000 in NPS under Section 80CCD(1B).

4. Deduction under Section 80E

If you have taken an education loan for yourself, spouse or children, then the interest paid on the loan qualify for tax benefit under Section 80E. The best thing here is that there is no upper limit on the amount of deduction. But the criteria is that the loan must have been taken from a financial institution or approved charitable institution and for full-time higher education.

5. Deduction of interest on housing loan (Section 24B)

If you have taken a housing loan to buy a house, then the interest you pay on your housing loan qualify for tax benefit under Section 24B. Interest paid up to Rs 2 lakh in a financial year on housing loan is allowed as deduction from your income. If you have taken a home improvement loan, then interest up to Rs 30,000 will be allowed as deduction under this section.

6. Deduction under Section 80EE

Re-introduced in Union Budget 2016, an additional deduction of Rs. 50,000 is available under this section, which is over and above the limit of Section 24B on interest paid on home loans if a person is buying a house for the first time. But there is a condition to avail this benefit. The cost of the property must be below Rs 50 lakh and the loan amount must be less than equal to Rs 35 lakh.Also, the property must be bought after April 1, 2016.

7. Deduction under Section 80D

Premiums paid for health insurance for self, spouse, children, and parents qualify for deduction under Section 80D. One can claim deduction of Rs. 25,000, if he is below 60 years of age, and Rs. 30,000 if he is above 60 years of age, towards medical insurance premium paid for self, spouse and children. Under this section, additional deduction of Rs. 25,000 is available if one buys medical insurance for his parents. This deduction can go up to Rs. 30,000 per year if parents are above the age of 60 years. So the total deduction you get under Section 80D is up to Rs 60,000.

8. Deduction under Section 80DD

If a taxpayer has dependent parents, spouse, children or siblings who are differently-abled, then he can claim deductions up to Rs. 75,000 for expenses on their maintenance and medical treatment under this section. If the disability is severe in nature, then the deduction can increase to Rs 1.25 lakh.

9. Deduction under Section 80DDB

Under this section, one can claim deduction of Rs. 40,000 for medical treatment of specified disease or ailment for self and dependents. The deduction can go up to Rs. 60,000 if the taxpayer is above 60 years of age and if he is above 80 years of age, then the deduction amount is up to Rs. 80,000. The diseases have been specified in Rule 11DD. To claim this benefit a certificate in form 10 I is to be furnished by the taxpayer from any registered doctor.

10. Tax benefit under Section 80TTA

Under this section, interest income up to Rs 10,000 per annum from savings accounts is allowed as a deduction from taxable income. However, interest earned from fixed deposits, term deposits do not qualify for deduction under this.

101 Replies to “Income tax slabs for FY 2017-18 and your options for tax saving”

    1. If you have given when & how much % of tax is to be paid?
      15th June.
      15 th September.
      15 th December, and
      15 th March.
      Worth giving this information.

    2. Really useful information. I learnt a lot about the exemption. As a super senior citizen, I am now aware of the tax slabs applicable for me.

  1. The article is very much useful and good for reference.
    But the amount of marginal relief is not specified. So the reader has to ask someone else or refer the act and rules.

  2. If taxpayer is having floter medical policy in which dependent parents are included, then how to claim under 80D. Premium amount cross the limit if Rs25000/- (Say 30000).Then how much amount he can claim

  3. THIS INFORMATION IS VERY HELPFUL FOR THOSE WHO DO NOT HAVE ANY IDEA.
    BECAUSE I HAVE THE SYSTEM I AM ABLE TO SEE. WHEN THIS GETS PUBLISHED IN PRESS IE ., NEWSPAPERS
    MILLIONS OF PEOPLE BE BENEFITED !

  4. Thanks or the News Letter on I Tax Slabs .
    Please let me know what are the non taxable incomes ?
    Are Director’s (of a Pvt Ltd company) income tax slabs same as any Individual ? hat are the taxable income and what facility can be provided to the salaried Director that are not taxable ?

  5. Very useful. I was not aware about tax rebate on my child education loan, which started in 2012, when he was sent abroad for study to USA. For the last 5 years, we have paid lot of interest on the loan taken from time to time from 2012 to date. The interest paid was more than 7 to 8 lakhs Rs. Can we get refund by any way?

    1. Very useful. I was not aware about tax rebate on my child education loan, which started in 2012, when he was sent abroad for study to USA. For the last 5 years, we have paid lot of interest on the loan taken from time to time from 2012 to date. The interest paid was more than 7 to 8 lakhs Rs. Can we get refund by any way?

  6. THE ARTICLE IS VERY USE FUL AND BENEFICIAL , IT GIVES CLEAR IDEA OF INCOME TAX CALCULATION,
    REGARDING HOUSE RENT RECIEVED 30 PER CENT DEDUCTION FOR MAINTENANCE FROM THE RENT RECIEVED NOT MENTIONED

  7. Really I found it very useful. Many thanks to you.
    1. Is there any more deductions exclusively pertaining to senior citizens/house wives .
    2. Please also give methods for investment by senior citizens to lessen tax burden.

    1. I am a Senior Citizen, age -80+. I do not have a Mediclaim policy, since no Insurance company is entertaining me. I keep spending on Medical expenses, by way of half-yearly/annual check-ups and regular medicines for my heart condition. Is there any way of claiming any exemption on medical expenses?

  8. I HAVE INVESTED AN AMOUNT OF RS. 300000/- IN APRIL 2017 IN DSP BALACKROCK TAX SAVER FUND. PL LET ME KNOW WHETHER I CAN AVAIL TAX BENEFIT UNDER SEC. 80C OF INCOME TAX ACT.

    1. I HAVE INVESTED AN AMOUNT OF RS. 300000/- IN APRIL 2017 IN DSP BALACKROCK TAX SAVER FUND. PL LET ME KNOW WHETHER I CAN AVAIL TAX BENEFIT UNDER SEC. 80C OF INCOME TAX ACT.
      REPLY TO MY ABOVE QUERY IS NOT YET RECD.

      Lakhvinder Singh

  9. Are there any tax deductions on conveyance for employees. Secondly are payments of school fees for children eligible for tax deduction?

  10. Thanks for the informative newsletter.
    I wish to clarify if the amount paid for Annual Preventive Health Check-up is deductible from the Income Tax,if so,then under which section.

    Thanks

  11. If l take personal loan till Feb. 2018 from mbgb Rs 300000 and my monthly income is cash in hand is 29000 something that how many piad will be tax.

  12. Dear sir/Madam

    How to pay advance Income Tax amount thru ONLINE against salary income or income from business
    under “Individual” catagory?

    With kind regards

    RADHAKRISHNA K.S.
    MOB: 9035733156

  13. I Am planing to sale my property and send my daughter to study in us. But how can i avoid tax. Because i have no any other income.and i won’t get any loan.

  14. Rs.5000 for preventive medical checkup also qualify for Deduction under Section 80D. This is apart from the insurance premium paid.
    It is not shown in this article.

  15. I would like to thank you very much E-Media Nama for providing the valuable tax information. I was confused before about the new slabs of Taxes, but this page cleared every thing.

    Thank you so much.

    Kavita

  16. Hi! I am a NRI and my wife I send money to her Indian savings non NRI account every month as family support. What is the tax implication? My Wife is a housewife

  17. I have availed housing loan for purchase of flat during June 17. The flat will be ready for occupation during Dec 2018. I am repaying the monthly interest from July 2017. ,I am first time home buyer. Can I claim interest exemption under section 24B for the current financial year 2017_18? Please guide me.

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