BUDGET 2018

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CHANGES IN

INCOME TAX SLABS

OVER THE YEARS

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Since independence, India's tax slabs have changed as the nation has progressed.

Here's a timeline of these changes.

1949-50

Tax rate imposed for the
first time

Incomes up to Rs. 10,000:

Tax reduced by 1/4th of an anna

First slab:

From one anna to nine pies

Second slab:

From two annas to “one nine pies”

*Anna - Former currency used in India and Pakistan. Equal to 1/16th of a rupee; one Anna = 4 paisa or 12 pies.

1974-75

Tax reduced to 75% from
highest ever 97.75%

Up to Rs. 6,000:

No income tax

Over Rs. 70,000:

70%. Surcharge rate was reduced to 10% for all categories

Highest slab:

Income tax + surcharge = 77% of the taxable income

1985-86

Number of tax slabs
reduced to four

Highest income tax reduced:

from 61.875% to 50%

Income < Rs. 18,000: No tax

Rs. 18,0001 to Rs. 25,000: 25%

Rs. 25,001 to Rs. 50,000: 30%

Rs. 50,001 to Rs. 1 lakh: 40%

Above Rs. 1 lakh: 50%

1992-93

Number of tax slabs
reduced to three

Rs. 30,000 to Rs. 50,000: 20%

Rs. 50,000 to Rs. 1 lakh: 30%

Above Rs. 1 lakh: 40%

1994-95

Tax slabs altered
but same rates

Rs. 35,000 to Rs. 60,000: 20%

Rs. 60,000 to Rs. 1.2 lakh: 30%

Above Rs. 1.2 lakh: 40%

1997-98

Rates were changed to
10%, 20% and 30%

Rs. 40,000 to Rs. 60,000: 10%

Rs. 60,000 to Rs. 1.5 lakh: 20%

Above Rs. 1.5 lakh: 30%

For salaried taxpayers,

deduction was reduced
Rs. 20,000

For employees earning Rs. 75,000, annually,

and contributing 10% to provident fund,
no tax was levied

2005-06

Considerable changes
to tax slabs

Upto Rs. 1 lakh: No Tax

Rs. 1 lakh to Rs. 1.5 lakh: 10%

Rs. 1.5 lakh to Rs. 2.5 lakh:20%

2010-11

Tax slabs changed
after five years

Upto Rs. 1.6 lakh: No Tax

Rs. 1.6 lakh to Rs. 5 lakh: 10%

Rs. 5 lakh to Rs. 8 lakh:20%

Above Rs. 8 lakh: 30%

2012-13

Exemption limit increased
to Rs. 2 lakh
from Rs. 1.8 lakh

Upto Rs. 1 lakh: No Tax

Rs. 1 lakh to Rs. 1.5 lakh: 10%

Rs. 1.5 lakh to Rs. 2.5 lakh: 20%

2017-18

Rs. 2.5 lakh to Rs. 5 lakh: 5%

Rs. 2.5 lakh to Rs. 3.5 lakh:
Rebate u/s 87A reduced to
Rs. 2,500 from Rs. 5000

Upto Rs. 3 lakh: No Tax

2018-19

Tax slabs remain the
same except for
some changes

Cess on income tax increased

to 4% from 3%

Standard tax deduction of Rs. 40,000 for transport and medical reimbursement

(in lieu of existing medical and conveyance reimbursement)

LTCG above Rs. 1 lakh to be taxed at 10%

For senior citizens:

Exemption on interest income on FDs and RDs increased to
Rs. 50,000 Section 80D deduction limit to be hiked to
Rs. 50,000 from Rs. 30,000