Income Tax Declaration To Your Employer: The Changes You Should Be Aware Of
Source | profit.ndtv.com : Written by Surajit Dasgupta
In the beginning of every fiscal year, employees are asked for details like their investment in ELSS (Equity Linked Savings Schemes), insurance policies, house rent, home loan, education loan etc. by their employer to arrive at the annual tax liability of an employee. This annual exercise also helps you do tax planning for the year. Based on the declaration, your employer calculates TDS or tax deducted at source. The employer will deduct tax from salary and deposit it with the tax authorities. Starting April 1, 2017, some income tax laws have changed.
Here are changes in tax laws you should be aware before submitting tax declaration:
1) The tax rate on income between Rs. 2.5 lakh and Rs. 5 lakh has been halved to 5 per cent from 10 per cent. However, rebate under Section 87A gets reduced from Rs. 5,000 to Rs. 2,500. And no rebate will be applicable for taxpayers having income above Rs. 3.5 lakh.
2) A 10 per cent surcharge will be applicable for individuals having income ranging from Rs. 50 lakh to Rs. 1 crore (existing surcharge of 15 per cent will remain the same for individuals having income above Rs. 1 crore). However, those with taxable income of above Rs. 50 lakh get the benefit of marginal relief. The concept of marginal relief is designed to provide some relief in levy of surcharge to a taxpayer where the total taxable income marginally exceeds Rs. 50 lakh or Rs. 1 crore.