Union Budget 2017: Know how you can pay less tax this year

New Delhi: Finance Minister Arun Jaitley presented the Union Budget 2017-18, offering more money for welfare schemes, minor tax sops for individuals and small firms.

In his fourth budget as Finance Minister, Jaitley made a slew of announcements for the individual tax payers, that will bring down the burden of taxation of the common man.

Here's how you can pay less tax this year following the FM's announcement.

1. Jaitley has proposed to reduce existing rate of taxation of those with income between Rs 2.5 lakh to Rs 5 lakh from 10 percent to 5 percent. The change in the personal income tax rate for individual assessees between Rs 2.5 lakh and Rs 5 lakh income would reduce the tax liability of all persons below Rs 5 lakh to either to zero (with rebate) or 50 percent of their existing liability.
2. While the taxation liability of people with income upto Rs 5 lakh is being reduced to half, all other categories of tax payers in the subsequent slabs will also get a uniform benefit of Rs 12,500 per person.
3. In order not to have duplication of benefit, the existing benefit of rebate available to the same group of beneficiaries is being reduced to Rs 2500 available only to assessees upto income of Rs 3.5 lakhs.
4. The combined effect of both these measures will mean that there would be zero tax liability for people getting income upto Rs 3 lakhs per annum and the tax liability will only be Rs 2,500 for people with income between Rs 3 and Rs 3.5 lakhs.
5. In the case of senior citizens above 60 years, there will be no tax upto Rs 3 lakh, while the exemption will be upto Rs 5 lakh in case of citizens above 80 years. Both the categories will attract income tax of 20 per cent on income between Rs 5 lakh and Rs 10 lakh and 30 per cent for income above Rs 10 lakh.
6. Though a 10 percent surcharge has been slapped on income between Rs 50 lakh and Rs 1 crore, the 15 percent surcharge on income above Rs 1 crore will continue.
7. In order to ensure timely filing of returns and expeditious issue of refund, a fee will be levied for delay in filing of return. If you file your tax return for 2017-18 by December 31, 2018, you will have to pay a penalty of Rs 5,000. And if you further delay it, you will have to pay Rs 10,000. This fee will be restricted to Rs 1,000 for small taxpayers with income up to Rs 5 lakh.
8. If the limit of Rs 1.5 lakh under Section 80C for investment is used fully the tax would be zero for people with income of Rs 4.5 lakhs.
9. Tax on notional rental income for builders would be calculated only after 1 year from the end of the year in which the completion certificate is received.
10. Making changes in capital gains taxation for immovable properties, Budget reduced holding period for computation of long term capital gain from three years to two years and shifted the base year for counting the cost of property from April 1, 1981 to April 1, 2001.