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Goods and Services Tax (GST):

Goods and Services Tax (GST) is an indirect tax which was introduced in India on 1 July 2017 and was applicable throughout India which replaced multiple cascading taxes levied by the central and state governments. It was introduced as The Constitution 101 Act 2017, following the passage of Constitution 122nd Amendment Act Bill. The GST is governed by a GST Council and its Chairman is the Finance Minister of India. Under GST, goods and services are taxed at the following rates, 0%, 5%, 12% ,18% and 28%. There is a special rate of 0.25% on rough precious and semi-precious stones and 3% on gold. In addition a cess of 22% or other rates on top of 28% GST applies on few items like aerated drinks, luxury cars and tobacco products. GST replaced a slew of indirect taxes with a unified tax and is therefore set to dramatically reshape the country's $2.8Tn economy.


The single GST(goods and service taxes) replaced several former taxes and levies which included: central excise duty, services tax, additional customs duty, surcharges, state-level value added tax and Octroi. Other levies which were applicable on inter-state transportation of goods have also been done away with in GST regime. GST is levied on all transactions such as sale, transfer, purchase, barter, lease, or import of goods and/or services. India adopted a dual GST model, meaning that taxation is administered by both the Union and State Governments. Transactions made within a single state are levied with Central GST (CGST) by the Central Government and State GST (SGST) by the State governments. For inter-state transactions and imported goods or services, an Integrated GST (IGST) is levied by the Central Government. GST is a consumption-based tax, therefore, taxes are paid to the state where the goods or services are consumed not the state in which they were produced.


Goods and services tax is continuously upgraded by the GST council for better results for the proper implementation. In the latest 23rd GST council meeting, several important decisions were taken by the panel and GoM to resolve immediate problems of the business community.There is a lot of speculation on the merging of slab tax rates and the same has been conveyed by Arvind Subramaniam in its suggestion. It is said that the two tax rates i.e. 12% and 18% might get merged into single slab rate across the product portfolio in order to maintain the multiplicity of tax rate applicability on a range of products.

Revised GST Rates Announced Post 23rd GST Council Meet:

Rates

Commodity/Services

Cost Inflation Index

Cost inflation index is the index for the inflation rate in the country. Central Board of Direct Taxes (CBDT) issues this index every year. CBDT on 5th June 2017 announced the Cost of Inflation Index for FY 2017-18 (AY 2018-19). The biggest change this year is that the base year was changed from the earlier FY 1981-82 to FY 2001-02.


It is a measure of inflation that is used for computing Long Term Capital Gains (LTCG) on the sale of capital assets as per IT Section.48. It is announced for each Financial Year but not based on Assessment Year. Hence, the applicable rate of CII will be for that particular financial year. To arrive at a capital gain, it is very much important to calculate the LTCG. For this purpose Cost of Inflation Index is a must. This revision of base year was proposed by the finance minister to address problems faced by taxpayers while calculating capital gains tax payable on the assets acquired on or before 1981. Taxpayers faced the problem of non-availability of relevant information for calculating fair market value of assets such as house property, jewellery as on 01.04.1981.


Cost Inflation Index (CII) applicable for FY 2017-18 and Subsequent years

Financial Year

Cost Inflation Index (CII)


Cost Inflation Index (CII) applicable for FY 2016-17 and Preceding years

Financial Year

Cost Inflation Index (CII)


Income Tax Rates

PART I: Income Tax Slab for Individual Tax Payers & HUF (Less Than 60 Years Old) (Both Men & Women)

Income Slab

Tax Rate


Income up to Rs 2,50,000*

No tax


Income from Rs 2,50,000 – Rs 5,00,000

5%


Income from Rs 5,00,000 – 10,00,000

20%


Income more than Rs 10,00,000

30%



Surcharge: 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.

Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.

Cess: 3% on total of income tax + surcharge.

*Income tax exemption limit for FY 2017-18 is up to Rs. 2,50,000 for individual & HUF other than those covered in Part(II) or (III)

PART II: Income Tax Slab for Senior Citizens (60 Years Old Or More but Less than 80 Years Old)(Both Men & Women)

Income Slab

Tax Rate


Income up to Rs 3,00,000*

No tax


Income from Rs 3,00,000 – Rs 5,00,000

5%


Income from Rs 5,00,000 – 10,00,000

20%


Income more than Rs 10,00,000

30%



Surcharge: 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.

Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.

Cess: 3% on total of income tax + surcharge.

*Income tax exemption limit for FY 2017-18 is up to Rs. 3,00,000 other than those covered in Part(I) or (III)

PART III: Income Tax Slab for Senior Citizens(80 Years Old Or More) (Both Men & Women)

Income Slab

Tax Rate


Income up to Rs 2,50,000*

No tax


Income up to Rs 5,00,000*

No tax


Income from Rs 5,00,000 – 10,00,000

20%


Income more than Rs 10,00,000

30%



Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.

Cess: 3% on total of income tax + surcharge.

*Income tax exemption limit for FY 2017-18 is up to Rs. 5,00,000 other than those covered in Part(I) or (II)

Income Tax Slab Rates for FY 2016-17(AY 2017-18)

PART I: Income Tax Slab for Individual Tax Payers & HUF (Less Than 60 Years Old) (Both Men & Women)

Income Slab

Tax Rate


Income up to Rs 2,50,000*

No tax


Income from Rs 2,50,000 – Rs 5,00,000

10%


Income from Rs 5,00,000 – 10,00,000

20%


Income more than Rs 10,00,000

30%



Surcharge: 15% of income tax, where total income exceeds Rs.1 crore.

Cess: 3% on total of income tax + surcharge.

*Income tax exemption limit for FY 2016-17 is up to Rs. 2,50,000 for individual & HUF other than those covered in Part(II) or (III).

PART II: Income Tax Slab for Senior Citizens (60 Years Old Or More but Less than 80 Years Old)(Both Men & Women)

Income Slab

Tax Rate


Income up to Rs 3,00,000*

No tax


Income from Rs 3,00,000 – Rs 5,00,000

10%


Income from Rs 5,00,000 – 10,00,000

20%


Income more than Rs 10,00,000

30%



Surcharge: 15% of income tax, where total income exceeds Rs.1 crore.

Cess: 3% on total of income tax + surcharge.

*Income tax exemption limit for FY 2016-17 is up to Rs. 3,00,000 other than those covered in Part(I) or (III)

PART III: Income Tax Slab for Senior Citizens(80 Years Old Or More) (Both Men & Women)

Income Slab

Tax Rate


Income up to Rs 2,50,000*

No tax


Income up to Rs 5,00,000*

No tax


Income from Rs 5,00,000 – 10,00,000

20%


Income more than Rs 10,00,000

30%



Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.

Cess: 3% on total of income tax + surcharge.

*Income tax exemption limit for FY 2016-17 is up to Rs. 5,00,000 other than those covered in Part(I) or (II)

Please also note that there is also a tax rebate of up to Rs 5,000 for a taxable income up to Rs 5 lakh.

Income Tax Slab For Domestic Cmpanies For FY 2016-17(AY 2017-18)

Income tax rate reduced to 29% (plus applicable surcharge and education cess) for domestic companies whose total turnover/gross receipts does not exceed Rs 5 crores.

In case you formed a manufacturing company, income tax rate of 25% for domestic companies, if set-up and registered after 1 March 2016 and does not claim any tax incentives.

In other cases, the tax rates remain unchanged at 30% (plus applicable surcharge and education cess).

Effective tax rates are as under:

Particulars

Turnover /Gross receipts less than Rs 5 crores (Both Men & Women)

Turnover /Gross receipts more than Rs 5 crore


Taxable income less than Rs 1 crore

Taxable income more than Rs 1 crore

Taxable income less than Rs 1 crore


Corporate tax
29%
29%

Surcharge
0%
7%

Corporate tax + surcharge
29%
31%

Education cess
3%
3%

Effective tax rate
29.87%
31.96%

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

[These income tax slab rates are also applicable for FY 2016-17 (AY 2017-18) and FY 2014-15 (AY 2015-16)]