Income Tax Rates for FY 2015-16 (AY 2016-17)

Indian Finance Minister, Shri Arun Jaitley has tabled today, the Union General Budget 2015-16 in Parliament. The Finance Minister has kept the Personal Income Tax rates unchanged.

Below are the Income Tax Slabs & Rates for FY 2015-16 or AY 2016 -17.

(FY is Financial Year. AY is Assessment Year)

Latest Income tax Rates for FY 2015-16

Income tax Rates for FY 2015-16

The above Income tax rates are for General category (Men / Women who are below 60 years of age).

The below table gives you clear idea about Income tax slabs / rates for all Tax payer categories. (For general category, Senior Citizens & Very Senior Citizens).

Income tax Rates for FY 2015-16 for all categories

The education cess on income-tax @ 2% for fulfillment of the commitment of the Government to provide and finance universalized quality based education and 1% of additional surcharge called ‘Secondary and Higher Education Cess on tax and surcharge is proposed to be continued for the financial year 2015-16 for all taxpayers.

Surcharge at the rate of 12% on individuals, HUFs, AOPs, BOIs, artificial juridical persons, firms, cooperative societies and local authorities having income exceeding Rs 1 crore.

 Details of tax deductions proposed are as follows:

  • Deduction u/s 80C Rs 1,50,000 is same.
  • Deduction u/s 80CCD has been increased by Rs 50,000 towards New Pension Scheme. The total contribution has been increased from Rs 1 Lakh to Rs 1.5 Lakh
  • Deduction on account of interest on house property loan (Self occupied property) Rs 2,00,000.
  • Deduction u/s 80D on health insurance premium Rs 25,000, increased from Rs 15000. For Senior Citizens it has been increased to Rs 30,000 from the existing Rs 20,000. For very senior citizen above the age of 80 years, not eligible to take health insurance, deduction is allowed for Rs 30,000 toward medical expenditure. (Kindly read : Medical Insurance Premium & Income Tax Benefits for Ay 2016-17)
  • Exemption of transport allowance Rs 19,200 (Increased from Rs 800 pm to Rs 1600 pm).
  • Payments (Interest & maturity amounts) on Sukanya Samriddhi Account Deposit Scheme is exempted from Income Tax Under Section 80c. So it comes under Exempt – Exempt – Exempt tax category. It looks better than PPF (Public Provident Fund) now.

Other Tax related proposals

  • Tax-free infra bonds proposed for funding irrigation, rail & road infrastructure projects. (Read : All you want to know about new Tax Free Bonds 2015-16)
  • Service tax rate  increased from 12.36 % to 14%.
  • Wealth tax to be replaced with 2% additional surcharge on taxable income over Rs 1 cr.
  • 100% TAX DEDUCTION on contributions made to SWACHH BHARAT & CLEAN GANGA initiatives.
  • PAN must for any sale exceeding Rs 1 Lakh. (Read : List of Financial Transactions where quoting PAN is mandatory)
  • Additional deduction of Rs 25,000 is allowed for differently-abled persons, increasing the limit from Rs 50,000 to Rs 75,000 (under Section 80 U) . It is also proposed to increase the limit of deduction from Rs 1 lakh to Rs 1.25 lakh in case of severe disability.
  • Deduction limit of Rs 60,000 on expenditure on account of specified diseases is enhanced to Rs 80,000 in the case of senior citizens (Under Section 80DD of the Income Tax Act).
  • For the benefit of senior citizens, service tax exemption will be provided on Varishta Bima Yojana.

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  • ANEESA NOUFAL says:

    Sir
    I am drawing TA of Rs. 800pm+DA onTA.
    Can I claim Income tax exemption of (TA+DA on TA )?

    • Sreekanth Reddy says:

      Dear Aneesa,
      Conveyance allowance/ Transport Allowance :
      Granted to employee to meet his/her expenditure for the purpose of commuting between place of his residences and the place of his duty.
      It is exempted up to Rs.800p.m.
      I believe that DA is fully taxable.

  • Vasudevan d says:

    Hi shreekant..I am a retired journalist I need your help to clarify me flowing tax commitment s..1. I am 66yrs old. I sold my house July 2015 and bought a semi commercial property being used as shop in Ulsoor market area on august 24.. I have completed due process of tax formalities for the year ended march 2016..got some refund so for the excess tax paid. But due to family compulsions..age factors and recent govt policies I wanted to dispose of the property..2. I need tk know what wiil be the capital gain tax if I sell it now . 3. I have received rent fro. The premises for which TDs is dedudu ed..some internet from bank deposit of ABT 1.2 lakhs will be the only additional I come..property bank accounts are all in joint Names

    with my wife..so can you advice the tax commitment or is it right to sell the property now..I have an offer now and also family requirement to go ahead..what do you suggest..tks.. vtvasu** @gmail.com.another id. Tks again
    P’s. I just saw your blog in f. B and decided to seek your suggestion. Tsk

    • Sreekanth Reddy says:

      Dear Vasudevan Ji,
      If Land or house property is held for 36 months or less then that Asset is treated as Short Term Capital Asset. You as an investor will make either Short Term Capital Gain (STCG) or Short Term Capital Loss (STCL) on that investment.

      Short Term Capital Gains are included in your taxable income and taxed at applicable income tax slab rates.

      Kindly read: How to save Capital Gains Tax on Sale of Land / House Property?

  • Rajkumar gola says:

    sir i have a query i am business during one year if in my account having 20lakh rupees submitted b/w 1 January to 1 December and before 1 December i have risen 18lakh rupees then at what type tax will be used on me. tell me soon sir i am confused.

    • Sreekanth Reddy says:

      Dear Rajkumar,
      Are these cash transactions?
      As long as you file your ITR correctly, it should not be of any issue.

  • manish says:

    my father is suffering from heart disease and mother from lung disease can I claim deduction

  • virendra rawat says:

    sir i am virendra rawat and i have sale out my land after 22 month than how can save tax on capital gain . sir plz advis me

  • Ankur Dixit says:

    in which section i can put Traveling Allowance for AY-2016-17

  • Samina says:

    Hello Sir,
    Thanks for solving all my query,one more query i noticed while filing itr1 in form 16 homeloan,lic,registration is not shown details of form16 given by employer i.e income chargeable under head dalaries 2,97,960 deduction 80c 18,688 so total income is 2,79,270 tax on total income is2,927 Rebate 2,000 Tax on total income after rebate 927 Educational cess 28 Tax payable 955 deduction tax deducted at source is 1,380 So tax payable/refundable is -425 so my question is filing filing itr 1 Salary 2.97,960 income under house property -1,29,695 so total is 1,68,265 and deduction under 80c is 1,63,380(principal+pf+registration+lic) so the system calculated only 1,50,000 instead of 1,63,380 So total income is 18,265 but the rebate is not getting calculated while filing itr1 its showing zero why it is showing zero am i had done anything while filing itr1

    Secondly as per form16 tax refund is 425 but when i filed with all details i.e home loan lic etc…it showing refund 1,380 which one is right please tell me

    Thirdly about TDS issued by employer i.e details of tax deducted and deposited in the central govt. Account through challan where to show the tax deposited amount of Rs.1,380 in itr1 should i show in income from salary or income other than salary if the show it in income other than salary then the refund is 1,380 but if i show in income from salary and income other than salary refund is 2,760 (1,380+1,380)

    Please tell me where to take TDS and which amount and what will be my Tax refund amount

    • Samina says:

      Hello sir,
      Please reply

      • Dear Samina,
        It is not wise to advise you on this without looking into the documents and tax calculation.
        If your employer has not considered tax deductions then you can claim them when filing your income tax return.
        TDS details can be shown in ‘taxes paid & verification’ sheet of ITR.

  • Shikha says:

    Sir, i am a salaried person and also involved in a small trading business. While filing an ITR , i have to show the income from my trading business – under the head ” INCOME FROM OTHER SOURCES ” . My doubt is that – here the INCOME amount that is to be showed is excluding the VAT Amount i.e my Total Sale amount – ( minus ) Total Purchase Amount ( Excluding VAT ). I am not wrong – since i have already made a serpate payment of VAT Tax – this amount would be exempted while computing Income tax – as per section 43B. Pls confirm

  • KARTHIKEYAN.K says:

    Kindly provide notification for conveyance exemption under income tax act with Details

  • kashmeri rekha boruah says:

    Please help me to solve this. It is given in the pay slip gross salary including allowances is Rs. 358259, where HRA =65824 ,transport allowance = 19097 for the PY 15-16. Again deduction shown in payslip
    PF= 15800 , PT= 832, Income tax = 5411, mobile deduction = 6874.
    Now I want to know which we have to take net salary or gross salary to calculate total income and whether Mobile deduction is calculated or not. Please help

    • Dear kashmeri,
      If your office duty require mobile / telephone / internet connection. You can claim 100% exemption against billed amount by producing original bills (only post-paid connections).
      To calculate total income you just need to add all the allowances, basic salary etc.,
      Use this calculator to know your tax liability, click here..

  • M.GUNASEKHAR REDDY says:

    DEAR SRIKANTH SIR,
    WHERE I CAN SHOW CONVEYANCE ALLOWANCE RS 19,200 IN MY FILING OF A.Y.2016-17

  • Harish says:

    Dear Sir,

    I have taken a housing loan in the year 2013 and while filing a return AY 2016-17 there is no option to show my interest payment towards housing loan. Whether Im not eligible to claim my interest payment or it has been removed. Pls clarify.

  • Anuj says:

    Dear Sir,

    Can tax-benefits via medical reimbursements be availed, even if the employer is providing medical allowance?

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