Tax Reckoner
Basic Tax Jargons
Financial Year, Assessment Year and Previous Year, do these commonly used income tax jargons often confuse you? This is what they mean.
- Financial Year (FY) – Duration of one year between 1st April to 31st March of the following year, in which all financial information are reported. The current financial year is 1st April 2014 to 31st March 2015.
- Assessment Year (AY) – The income of a particular financial year is assessed in the following financial year, which is known as the assessment year. For the current financial year, income will be assessed in the assessment year 2015-2016.
- Previous Year (PY) – The financial year proceeding the assessment year, the income of which is assessed in the following assessment year. Assessment year 2015-2016 will assess income for previous year 2014-2015.
- Income Tax Slabs – With the upward revision of the tax slabs, there would now be more savings for the consumers. Basic tax exemptions limits have been retained; however, the brackets have been broadened. Below are the income tax slabs and rates applicable for the current financial year 2018-19 and assessment year 2019-20.
Income Tax Slab Rate for AY 2018-19 for Individuals:
Individual (resident or non-resident), who is of the age of less than 60 years on the last day of the relevant previous year:
| Taxable income | Tax Rate |
|---|---|
| Up to Rs. 2,50,000 | Nil |
| Rs. 2,50,000 to Rs. 5,00,000 | 5% |
| Rs. 5,00,000 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
Resident senior citizen, i.e., every individual, being a resident in India, who is of the age of 60 years or more but less than 80 years at any time during the previous year:
| Taxable income | Tax Rate |
|---|---|
| Up to Rs. 3,00,000 | Nil |
| Rs. 3,00,000 - Rs. 5,00,000 | 5% |
| Rs. 5,00,000 - Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
Resident super senior citizen, i.e., every individual, being a resident in India, who is of the age of 80 years or more at any time during the previous year:
| Taxable income | Tax Rate |
|---|---|
| Up to Rs. 5,00,000 | Nil |
| Rs. 5,00,000 - Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
Surcharge: 10% of tax where total income exceeds Rs. 50 lakh, 15% of tax where total income exceeds Rs. 1 crore
Education cess: 4% of tax plus surcharge
Note: A resident individual is entitled for rebate u/s 87A if his total income does not exceed Rs. 3,50,000. The amount of rebate shall be 100% of income-tax or Rs. 2,500, whichever is less.
