The Union Budget presentation for the financial year 2018-19 revealed there were no changes in the tax slabs but there were new improvements which include an increase in education and healthcare cess chargeable on taxable income and standard deduction. Below is the detailed information on tax slabs for individual taxpayers and Hindu Undivided Family (HUF) in India.
Income Tax Slabs for Individuals (men & women less than 60 years of age) & HUF
The above picture depicts Income Tax Slabs for men and women less than 60 years of age and HUF.
What is Surcharge?
Surcharge is an additional tax charged over taxable income. Surcharge is a part of the progressive tax system followed in India. A progressive tax system ensures that individuals with higher income contribute more tax than those with lesser income.
Income Tax Slabs for Senior Citizens (men & women between 60 & 80 years of age)
The above picture depicts income tax slabs for senior citizens above 60 but below 80 years of age.
What is Cess?
Cess or health and education cess is an additional tax deduction on taxable income. Amount collected from education and health cess goes towards the funding of education and health projects of the government of India.
Income Tax Slabs for Super Senior Citizens (men & women above 80 years of age)
Above picture shows the income tax slab and tax rates for senior citizens over 80 years of age.
What are the changes in taxation this year?
There have been no changes in the tax slabs for the FY 2018-19. However, salaried employees and pensioners get a standard deduction of Rs 40,000 in lieu of transport and medical expenses. The education cess has also increased to 4% from 3%. This move was made to fund the new educational plans of the government for the coming year.
Also Read: What is Standard Deduction in India?
Understanding the difference between FY and AY in India
Financial Year (FY) and Assessment Year (AY) are both periods between April 1 to March 31 of the following calendar year.
For tax computation purposes FY is the year where earn your income and AY is the year your income is assessed for taxes. For example your income earned between April 1st, 2017 to March 31st, 2018 will be assessed and taxed between April 1, 2018 to March 31st, 2019.