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Rates of Income Tax on Salaries for the Fin Year 2014-15: Income Tax Circular 17/2014

Click to view Part I of Income Tax on Salaries – Circular No. 17/2014


2. RATES OF INCOME-TAX AS PER FINANCE (No. 2) ACT, 2014:

As per the Finance (No. 2) Act, 2014, income-tax is required to be deducted under Section 192 of the Act from income chargeable under the head “Salaries” for the financial year 2014-15 (i.e. Assessment Year 2015-16) at the following rates:

2.1 Rates of tax



A. Normal Rates of tax:

Sl No Total Income Rate of tax
1 Where the total income does not exceed Rs.2,50,000/-. Nil
2 Where the total income exceeds Rs. 2,50,000 but does not exceed Rs.
5,00,000/-
10 per cent of the amount by which the total income exceeds Rs. 2,50,000/-
3 Where the total income exceeds Rs.5,00,000/- but does not exceed Rs. 10,00,000/- Rs. 25,000/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-.
4 Where the total income exceeds Rs. 10,00,000/-. Rs. 1,25,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-

B. Rates of tax for every individual, resident in India, who is of the age of sixty years or more but less than eighty years at any time during the financial year:



Sl No Total Income Rate of tax
1 Where the total income does not exceed Rs. 3,00,000/- Nil
2 Where the total income exceeds Rs. 3,00,000 but does not exceed Rs. 5,00,000/- 10 per cent of the amount by which the total income exceeds Rs. 3,00,000/-
3 Where the total income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/- Rs. 20,000/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-.
4 Where the total income exceeds Rs. 10,00,000/- Rs. 1,20,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-

C. In case of every individual being a resident in India, who is of the age of eighty years or more at any time during the financial year:



Sl No Total Income Rate of tax
1 Where the total income does not exceed Rs. 5,00,000/- Nil
2 Where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000/- 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-
3 Where the total income exceeds Rs. 10,00,000/- Rs. 1,00,000/- plus 30 per cent of the amount by which the total income exceeds Rs. 10,00,000/-

2.2 Surcharge on Income tax:

The amount of income-tax shall be increased by a surcharge @10% of the income-tax on payments to an  individual taxpayer, if the total income of the individual exceeds Rs 1 crore during FY 2014-15 (AY 2015-16). However the amount of Surcharge shall not exceed the amount by which the individualโ€˜s total income exceeds Rs 1 crore and if surcharge so arrived at, exceeds such amount (assesseeโ€˜s total income minus one crore) then it will be restricted to the amount of total income minus Rupees one crore.

2.3.1 Education Cess on Income tax:

The amount of income-tax including the surcharge if any, shall be increased by Education Cess on Income Tax at the rate of two percent of the income-tax.

2.3.2 Secondary and Higher Education Cess on Income-tax:

An additional education cess is chargeable at the rate of one percent of income-tax including the surcharge if any, but not including the education cess on income-tax as in 2.3.1.

6. REBATE OF RS 2000 FOR INDIVIDUALS HAVING TOTAL INCOME UPTO RS 5 LAKH [SECTION 87A]

Finance Act 2013 provided relief in the form of rebate to individual taxpayers, resident in India, who are in lower income bracket, i. e. having total income not exceeding Rs 5,00,000/-. The amount of rebate is Rs 2000/- or the amount of tax payable, whichever is lower. This rebate is available for A.Y. 2014-15 and subsequent assessment years.

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