In budget 2014, our honorable finance minister has increased tax threshold limits for the financial year 2014-2015. Below this tax threshold limit, income for the financial year starting from 1st April 2014 to 31st march 2015 is not taxable in India.
We have three different threshold limits divided based on the age group. Budget 2014 has increased the basic threshold limit for tax payers who are below 60 years of age from Rs. 2 lakhs to Rs. 2.5 lakhs. Which means, for the financial year starting from 1st of April 2014 to 31st March 2015 (AY 2015-2016) individual taxpayers are not required to pay tax up to Rs. 250000 if they are below 60 years of age. Such increase of Rs. 50000 will be beneficial to all salary and non salary individuals in India.
Threshold limit for taxpayers who are 60 years of age or above but below 80 years of age has also been increased in budget 2014. Earlier limit of Rs. 250000 has been changed to Rs. 300000 by which below Rs. 300000, income will not be taxable for senior citizens.
However, threshold limit for supper senior citizen i.e. 80 years of age and above, kept unchanged. Earlier basic exemption limit of Rs. 500000 kept unchanged.
Threshold limit and tax rates for AY 2015-2016 (financial year 2014-2015)
| Total income slab rates | Tax rates in percentage |
|
Below 60 years of Age |
|
| Up to Rs. 2,50,000 | Nil |
| Rs. 250001 to Rs. 500000 | 10% |
| Rs. 500000 to Rs. 100000 | 20% |
| Above Rs. 100000 | 30% |
|
60 Years to 79 Years of age |
|
| Up to Rs. 300000 | Nil |
| Rs. 300001 to Rs. 500000` | 10% |
| Rs. 500001 to Rs. 100000 | 20% |
| Above Rs. 1000000 | 30% |
|
80 Years and Above |
|
| Up to Rs. 500000 | Nil |
| Rs. 500001 to Rs. 1000000 | 20% |
| Above Rs. 1000000 | 30% |
Tax rates, surcharge and education cess as applicable for the last financial year remain unchanged in budget 2014.
Rebate as applicable under section 87A also remain unchanged by which taxpayers having income below Rs. 500000 are eligible for tax rebate of Rs. 2000. This means, there will not be any tax on a person below 60 years of age having total income of up to Rs. 270000 (250000+2000*10).
