Tax Slabs Explained

Tax Slabs Explained

Current income tax slabs

How will my savings in a life insurance plan help my tax situation?

What follows below will give you a good idea of how your investments not only protect you and your family; they also protect your taxes.

Tax Slabs

This explains how the various tax brackets in India work and how much tax relief we are all eligible for. The new tax structure was initiated on 1st April 2016.

The tax structure is as follows:

 Tax slabs for Financial Year 2016-17 (Assessment Year 2017-18)

 For Individuals below 60 years of age

 Income Level

 Tax Rate

 Upto Rs. 2,50,000

 Nil

 Rs. 2,,50,001 - Rs. 500,000

 10%

 Rs. 500,001 - Rs. 10,00,000

 20%

 Above Rs. 10,00,000

 30%

 

 Tax slabs for Financial Year 2016-17 (Assessment Year 2017-18)

 For Senior Citizens aged 60 years 
 or above but less than 80 years

 For Very Senior Citizens aged
 80 years or above

 Income Level

 Tax Rate

 Income Level

 Tax Rate

 Upto Rs. 300,000

 Nil

 -

 -

 Rs. 300,001-Rs. 500,000

 10%

 Upto Rs. 500,000

 Nil

 Rs. 500,001-Rs.10,00,000

 20%

 Rs. 500,001-Rs.10,00,000

 20%

 Above Rs. 10,00,000

 30%

 Above Rs. 10,00,000

30%

 

Education Cess & Secondary & Higher Education Cess on Income TaxSurcharge on Income Tax:

From Financial Year 2013-14, Surcharge is applicable @ 10% on tax payable in case of an individual if total income exceeds Rs. one crore

Education Cess @ 2% & Secondary & Higher Education cess @ 1% will be payable on the amount of income tax.

Service Tax

All premiums and charges are subject to service tax and cess (SBC and KKC) as per prevailing tax laws. Current Service Tax rates are as under:

  • Traditional endowment/ annuity 3.750% on First year premium
  • 1.875% on subsequent year premium and
  • 1.50% in case of Single premium annuity Products.
  • ULIP charges, Term, Health products & Riders, ST rate is 15%.

The above are extracts from the Income Tax Act’1961. Please note that tax laws are subject to change and hence before placing reliance on the above, the latest version of the above section should be checked. It should also be noted that the change in tax laws could have retrospective effect also.
This information should not be construed as expert tax, legal or investment opinion from Max Life Insurance Company Limited. Max Life Insurance Company Limited would not be responsible in any manner for decisions made on the basis of above information.
Please consult your tax advisor for claiming tax benefits on insurance products.
Sec 194DA of Income Tax Act 1961 provides for deducting tax (TDS) on policyholders payout under life insurance policy w.e.f. 01 Oct 2014. TDS, if applicable, will be deducted at 2% if valid PAN is available upto 31st May 2016. W.e.f. 01st June 2016, TDS rates has been reduced to 1%. 
Policyholders can furnish forms 15G/15H for non deduction of TDS where total income /estimated total income during financial year does not exceed maximum amount not chargeable to tax. Further in case valid PAN is not available, rate of TDS would be 20%.


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