The tax an Indian pays every year is calculated on the basis of his/her gross total income. The tax is calculated according to the income tax slabs announced by the government every year in the Budget. The annual union budget is normally announced in the month of February.
Income tax slab rates for the financial year 2016-17 (assessment year 2017-18)
Normal tax rates applicable to a resident individual below the age of 60 years, non-resident individual, resident/non-resident HUF, AOP, BOI, artificial juridical person.
Normal tax rates applicable to a resident individual of the age of 60 years or above at any time during the year but below the age of 80 years.
Normal tax rates applicable to a resident individual of the age of 80 years or above at any time during the year
After taking the deductions under Section 80 (C) to 80 (U), the tax is payable after adding the cess and surcharge, if applicable.
The surcharge is levied @ 15% on the amount of income tax where net income exceeds Rs 1 crore. In case where surcharge is levied, the cess will be levied on the tax amount plus surcharge.
However, a resident individual whose net income is equal to or less than Rs 5 lakh can avail rebate under Section 87(A). The amount of rebate under this section is 100% of the income tax or Rs 5,000 whichever is less. It is deductible before calculating the cess