Income Tax Slab Rates FY 2015-16 (AY 2016-17)

Last updated: 3 June 2026

For Financial Year 2015-16 (Assessment Year 2016-17), the basic tax slabs were unchanged from FY 2014-15. The landmark Budget 2015 changes were: Wealth Tax abolished, Section 80CCD(1B) introduced (additional ₹50,000 NPS deduction), surcharge raised to 12% for income above ₹1 crore, and Section 80D limit enhanced. The Section 87A rebate remained at ₹2,000.

80CCD(1B) born

Budget 2015 introduced the extra ₹50,000 NPS deduction under Section 80CCD(1B) — allowing total tax savings on NPS contributions of up to ₹2,00,000 per year under the old regime.

Individual — Below 60 Years (FY 2015-16)

Income Slab	Tax Rate	Effective Tax
Up to ₹2,50,000	Nil	₹0
₹2,50,001 – ₹5,00,000	10%	Up to ₹25,000 (less 87A rebate of ₹2,000)
₹5,00,001 – ₹10,00,000	20%	₹25,000 + 20% of amount above ₹5L
Above ₹10,00,000	30%	₹1,25,000 + 30% of amount above ₹10L

Add: Education Cess 2% + Secondary & Higher Education Cess 1% = 3% cess on income tax payable (after 87A rebate).

Senior Citizens (Age 60–79) — FY 2015-16

Income Slab	Tax Rate
Up to ₹3,00,000	Nil
₹3,00,001 – ₹5,00,000	10%
₹5,00,001 – ₹10,00,000	20%
Above ₹10,00,000	30%

Super Senior Citizens (Age 80+) — FY 2015-16

Income Slab	Tax Rate
Up to ₹5,00,000	Nil
₹5,00,001 – ₹10,00,000	20%
Above ₹10,00,000	30%

Section 87A Rebate — FY 2015-16

Resident individuals with total income up to ₹5,00,000 were entitled to a rebate of up to ₹2,000 (or actual tax, whichever is lower) under Section 87A. This rebate was applied before the 3% cess. The rebate was raised to ₹5,000 in FY 2016-17 (Budget 2016).

Surcharge — FY 2015-16

Income Level	Surcharge Rate
Up to ₹1,00,00,000	Nil
Above ₹1,00,00,000	12% of income tax

The surcharge was raised from 10% (FY 2014-15) to 12% (FY 2015-16) partly to offset the revenue lost from abolishing Wealth Tax. Marginal relief applies.

Budget 2015 Key Changes for Individuals

Change	Detail
Section 80CCD(1B) — new NPS deduction	Additional ₹50,000 deduction for NPS Tier-I contributions over and above 80C limit
Section 80D — health insurance	Limit raised from ₹15,000 to ₹25,000; ₹30,000 for senior citizens; ₹5,000 for preventive health check-up (within overall limit)
Wealth Tax abolished	Wealth Tax Act 1957 ceased to apply from AY 2016-17 onwards
Surcharge raised	From 10% to 12% on income above ₹1 crore (individuals)
GAAR deferred	General Anti-Avoidance Rules implementation deferred to FY 2017-18
Section 80G expansion	Donations to National Fund for Control of Drug Abuse eligible for 100% deduction

Exemptions and Deductions Available in FY 2015-16

Item	Limit / Amount
Section 80C (EPF, PPF, LIC, ELSS, tuition fees, home loan principal, etc.)	Up to ₹1,50,000
Section 80CCD(1B) — NPS additional (new from FY 2015-16)	Up to ₹50,000
Section 80D — Health insurance premium	₹25,000 (₹30,000 for senior citizens)
Transport allowance exemption	₹9,600/year (₹800/month; raised to ₹19,200 from FY 2016-17)
Medical reimbursement	₹15,000/year (bills required)
HRA exemption	Least of: actual HRA, 50%/40% of basic, rent minus 10% basic
Standard deduction	Not applicable (introduced FY 2018-19)
Section 80TTA — savings bank interest	Up to ₹10,000

Historical Slab Comparison: FY 2014-15 to FY 2016-17

Feature	FY 2014-15	FY 2015-16	FY 2016-17
Basic exemption (individual)	₹2,50,000	₹2,50,000	₹2,50,000
Senior citizen exemption	₹3,00,000	₹3,00,000	₹3,00,000
Super senior exemption	₹5,00,000	₹5,00,000	₹5,00,000
Section 87A rebate	₹2,000 (income ≤ ₹5L)	₹2,000 (income ≤ ₹5L)	₹5,000 (income ≤ ₹5L)
Surcharge (income > ₹1Cr)	10%	12%	15%
Education cess	3%	3%	3%
Transport allowance	₹9,600/yr	₹9,600/yr	₹19,200/yr
80CCD(1B) NPS deduction	Not available	Up to ₹50,000 (new)	Up to ₹50,000
Wealth Tax	Applicable	Abolished	Abolished

Frequently Asked Questions

When was the Section 80CCD(1B) additional NPS deduction of ₹50,000 introduced?

Section 80CCD(1B) was introduced by Budget 2015 (Finance Act 2015), effective from FY 2015-16 (AY 2016-17). It provides an additional deduction of up to ₹50,000 for contributions made to the National Pension System (NPS) Tier-I account, over and above the ₹1,50,000 limit under Section 80C. This means the total NPS-related deduction can be up to ₹2,00,000 per year (₹1,50,000 under 80C/80CCD(1) + ₹50,000 under 80CCD(1B)) — a significant benefit that remains available under the old regime as of 2026.

Why was Wealth Tax abolished in Budget 2015?

Wealth Tax, governed by the Wealth Tax Act 1957, was abolished from FY 2015-16 (applicable from AY 2016-17) through the Finance Act 2015. It had become a high-cost, low-yield tax — it collected less than ₹1,000 crore annually but required significant compliance and administrative effort. To compensate, a surcharge of 2% was added on income above ₹1 crore (raising the surcharge from 10% to 12% in FY 2015-16). Taxpayers were no longer required to file a wealth tax return from FY 2015-16 onwards.

What was the Section 87A rebate in FY 2015-16?

In FY 2015-16, the Section 87A rebate was ₹2,000 for resident individuals with total taxable income up to ₹5,00,000. This rebate was applied against the income tax payable (before cess) and could reduce the tax liability to zero if the tax was ₹2,000 or less. The rebate was later raised to ₹5,000 in FY 2016-17 and then reduced to ₹2,500 in FY 2017-18 before being enhanced substantially under the new tax regime from FY 2023-24 onwards.

What changed in Budget 2015 for individual taxpayers?

Key changes in Budget 2015 affecting individuals: (1) Section 80CCD(1B) introduced — additional ₹50,000 NPS deduction; (2) Section 80D limit for health insurance raised from ₹15,000 to ₹25,000 (₹30,000 for senior citizens); (3) Wealth Tax abolished; (4) GAAR (General Anti-Avoidance Rules) implementation deferred; (5) Section 80G donations to National Fund for Control of Drug Abuse added; (6) Surcharge on income above ₹1 crore raised from 10% to 12%; (7) Basic slab rates and exemption limits remained unchanged from FY 2014-15.

Were the income tax slab rates different in FY 2015-16 compared to FY 2014-15?

No — the basic slab rates and exemption thresholds for individuals were identical in FY 2015-16 and FY 2014-15: nil up to ₹2.5 lakh, 10% from ₹2.5L to ₹5L, 20% from ₹5L to ₹10L, and 30% above ₹10L. Senior citizen threshold remained ₹3 lakh and super senior citizen threshold ₹5 lakh. The notable difference was the surcharge increase (10% to 12% on income > ₹1Cr), wealth tax abolition, and the new Section 80CCD(1B) deduction for NPS.

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