Income Tax Slabs 2017: Find out your tax liability, how to file ITR and more

Income Tax (IT) slabs have been tinkered with a bit by Finance Minister Arun Jaitley during his Budget speech on February 1, 2017. If you are looking to file your Income Tax Returns (ITR) and have a few questions regarding your income tax slab or how much tax you can save this year, read on.

Financial Year runs between April 1 and March 31 of each year. Income tax is calculated for this period. Income tax returns are assessed the year after the financial year has finished. Pic: Reuters

If you are looking to file your Income Tax Returns (ITR) and have a few questions regarding your income tax slab or how much tax you can save this year, read on.

The last date to file your income tax is July 31, 2017 and one can verify those filed tax returns up to November 30, 2017.

Are you liable to pay income tax?

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If you run a business, earn a salary or have income through any other means greater than the lowest income tax slab then you are liable to pay income tax.

Income tax slabs

Finance Minister Arun Jaitley made slight changes to income tax slabs this year that allows people saving of up to Rs 12,500.

Income up to Rs 2,50,000: No tax.
Income between Rs 2,50,001 to Rs 5,00,000: 5%% income tax.
Income between Rs 5,00,001 to Rs 10,00,000: 20% income tax.
Income above Rs 10,00,000: 30% income tax.
Income between Rs 50 lakh and Rs 1 crore: 30% plus 10% surcharge.
Income above Rs 1 crore: 30% plus 15% surcharge

CALCULATE YOUR INCOME TAX HERE.

Exemptions allowed

Government of India allows investments of certain kinds as exemptions to your income. These help you in saving some of the income tax that you would have otherwise paid.

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These income tax deductions are covered under section 80C of the Income Tax Act.
maximum saving allowed in this section is Rs 1,50,000 per year.
Section 80D allows income tax deductions for health of your children, spouse, parents or yourself.
Maximum income tax deduction allowed in this category is Rs 55,000 with Rs 30,000 allowed if you pay health insurance for your parents and the rest for your children, spouse and yourself.
Rs 5,000 can also be deducted from your income tax for preventative health checkup each year.
You can also donate money to approved charities to save 50% income tax under section 80G. Some charities allow for full donation to be income tax exempt.
National Pension Scheme (NPS) also allows for an additional saving of Rs 50,000 on income tax if you have exhausted all other income tax saving options.
Interest earned on your savings bank account up to Rs 10,000 per year is also tax-deductible under Section 80TTA.

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ClearTax says, "Financial Year runs between April 1 and March 31 of each year. Income tax is calculated for this period. Income tax returns are assessed the year after the financial year has finished. So that’s your Assessment Year. During the assessment year, taxpayers file their income tax return. Income tax return and refunds are processed by the I-T Department that year."