Tax Reckoner


Basic Tax Jargons
Financial Year, Assessment Year and Previous Year, do these commonly used income tax jargons often confuse you? This is what they mean.

1. Financial Year (FY) – Duration of one year between 1st April to 31st March of the following year, in which all financial information are reported. The current financial year is 1st April 2014 to 31st March 2015.

2. Assessment Year (AY) – The income of a particular financial year is assessed in the following financial year, which is known as the assessment year. For the current financial year, income will be assessed in the assessment year 2015-2016.

3. Previous Year (PY) – The financial year proceeding the assessment year, the income of which is assessed in the following assessment year. Assessment year 2015-2016 will assess income for previous year 2014-2015.

4. Income Tax Slabs – With the upward revision of the tax slabs, there would now be more savings for the consumers. Basic tax exemptions limits have been retained; however, the brackets have been broadened. Below are the income tax slabs and rates applicable for the current financial year 2014-15 and assessment year 2015-16.

India Income tax slabs 2014-2015 for General tax payers and Women:

Income tax slab (in Rs.) Tax Rate
Up to Rs 2,50,000 NIL
Rs 2,50,001 to Rs 5,00,000 10 per cent
Rs 5,00,001 to Rs 10,00,000 20 per cent
Above 10,00,000 30 per cent

India Income tax slabs 2014-2015 for Senior citizens (Aged 60 years but less than 80 years):

Income tax slab (in Rs.) Tax Rate
Up to Rs 500,000 NIL
Rs 5,00,001 to Rs 10,00,000 10 per cent
Above 10,00,000 30 per cent

India Income tax slabs 2014-2014 for very senior citizens (Aged 80 and above):

Income tax slab (in Rs.) Tax Rate
Up to Rs 3,00,000 NIL
Rs 3,00,001 to Rs 5,00,000 10 per cent
Rs 5,00,001 to Rs 10,00,000 20 per cent
Above 10,00,000 30 per cent

Others Tax Benefits in this budget:

  • 80C Limit increased from Rs 1 lacks to Rs 1.5 lacks
  • Maximum Limit to PPF increased from Rs 1 lacks to Rs 1.5 lacks
  • Home loan interest free calculation increased from Rs 1.5 lacks to Rs 2 lacks
  • No change in the rate of surcharge either for the corporates or the individuals, HUFs, firms etc.
  • The education cess to continue at 3 percent
  • Investment limit under section 80C of the Income-tax Act raised from Rs 1 lakh to Rs 1.5 lakh
  • Deduction limit on account of interest on loan in respect of self-occupied house property raised from Rs 1.5 lakh to Rs 2 lakh