Income Tax Slab For FY 2019-20 ( AY 2020-21 )

Last Updated –  27 January 2020

In budget 2017, the government makes changes in the income tax slab rate for the AY 2018-19. These changes bring relief to the middle class.

After demonetization, people were expecting higher tax-free income, but the government has given relief by changing the tax rate for the individual.

You may also like to read How to file income tax return online.

Highlights of Income Tax Slab For Fy 2019-20

  • Income taxpayers can use either PAN or Aadhar to file Income Tax. (Earlier PAN was mandatory).
  • Interest deduction on housing loan under Section 80EEA increased by 1.5 lakh for home loans for house cost above Rs. 45 lakh (not for commercial benefits)
  • Surcharge increased to 25% for individuals having income between Rs. 2 crores to 5 crores.
  • Section 35AD deduction extended to Li-On battery, semi-conductor, laptops, and solar cell fabrication.
  • Marginal relief on the surcharge for ay 2020-21 in case assessee has to pay the surcharge.
  • Additional income tax deduction of up to Rs. 1.5 lakhs is proposed on interest paid for the loan taken to purchase electric vehicles under section 80EEB.

Income Tax Slab for Individuals/HUFs under Age 60 (For AY 2020-21)

This slab is both for individual men and women. This is also applicable to Non-Resident Indian, Hindu Undivided Family ( HUF), Body of Individuals, Artificial Judicial Person and Associations of Person.

Net Income Slab (Gross Taxable Income – deductions) Income Tax Rate Surcharge Health & Education Cess Rebate u/s 87A  (FY 2019-20)
Upto 2,50,000 Nil Nil Nil Nil
From 2,50,001- 5,00,000 5% Nil 4% For income upto Rs 5 lakhs Tax Rebate upto  Rs 12,500
From 5,00,001-10,00,000 12,500 + 20% Nil 4% Nil
From 10,00,001-50,00,000 1,12,500/- + 30% Nil 4% Nil
From 50,00,001-1,00,00,000 13,12,500 + 30% 10% 4% Nil
Above 1,00,00,000 but upto 2,00,00,000 28,12,500 + 30% 15% 4% Nil
Above 2,00,00,000 but upto 5,00,00,000 58,12,500 + 30% 25% 4% Nil
Above 5,00,00,000 1,48,12,500 + 30% 37% 4% Nil

Rebate under 87A

Rebate of Rs 12,500 or 100% income tax (whichever is low) for the individuals who have total income between Rs 2.5 lakh to Rs 5 lakh.

Individuals having income up toRs 2.5 lakh don’t have to pay any tax.

Let’s calculate – Suppose net income Rs 5,00,000. tax payable will be 5% of 5,00,000  that is 25,000.

But as per slab, 100% tax rebate up to 2,50,000.

Income tax payable on income up to Rs. 2,50,000 = 0

The income left under tax payable slab = 5,00,000 – 2,50,000 = 2,50,000

Income tax payable on rest of the income = 5% of the rest of the income) = 5% of 2,50,000

= 12,500.

Tax rebate for income between Rs 2.5 lakh to Rs 5 lakh. = (expected tax payable) – (actual tax payable) = 25,000 – 12,500 = 12,500

Income Tax for Senior Citizens Age Between 60 to 80 (For AY 2020-21)

Senior citizens get an extra relief from the government through the higher tax-free slab.

Net Income Slab (Gross Taxable Income – deductions) Income Tax Rate Surcharge Health & Education Cess Rebate u/s 87A  (FY 2019-20)
Upto 3,00,000 Nil Nil Nil Nil
From 3,00,001- 5,00,000 5% Nil 4% For income upto Rs 5 lakhs Tax Rebate upto Rs 12,500
From 5,00,001-10,00,000 10,000 + 20% Nil 4% Nil
From 10,00,001-50,00,000 1,10,000/- + 30% Nil 4% Nil
From 50,00,001-1,00,00,000 13,10,000 + 30% 10% 4% Nil
Above 1,00,00,000 28,10,000 + 30% 15% 4% Nil
Above 2,00,00,000 but upto 5,00,00,000 58,10,000 + 30% 25% 4% Nil
Above 5,00,00,000 1,48,10,000 + 30% 37% 4% Nil

You may also like to read How to check income tax refund status.

Income Tax for Senior Citizens Age above 80 (For AY 2020-21)

The senior citizen having age more than 80 years gets the highest tax-free income slab. For the super senior citizen, no income tax on income below Rs 5 lakh.

Net Income Slab (Gross Taxable Income – deductions) Income Tax Rate Surcharge Health & Education Cess Rebate u/s 87A  (FY 2019-20)
Upto 5,00,000 Nil Nil Nil Nil
From 5,00,001- 10,00,000 20% Nil 4% Nil
From 10,00,001-50,00,000 1,00,000 + 30% Nil 4% Nil
From 50,00,001-1,00,00,000 13,00,000 + 30% 10% 4% Nil
Above 1,00,00,000 28,00,000 + 30% 15% 4% Nil
Above 2,00,00,000 but upto 5,00,00,000 58,00,000 + 30% 25% 4% Nil
Above 5,00,00,000 1,48,00,000 + 30% 37% 4% Nil

Income Tax Slab for Non Resident Individuals (Male & Female)

Net Income Slab (Gross Taxable Income – deductions) Income Tax Rate Surcharge Health & Education Cess Rebate u/s 87A  (FY 2019-20)
Upto 2,50,000 Nil Nil Nil Nil
From 2,50,001- 5,00,000 5% Nil 4% Nil
From 5,00,001-10,00,000 12,500 + 20% Nil 4% Nil
From 10,00,001-50,00,000 1,12,500/- + 30% Nil 4% Nil
From 50,00,001-1,00,00,000 13,12,500 + 30% 10% 4% Nil
Above 1,00,00,000 28,12,500 + 30% 15% 4% Nil
Above 2,00,00,000 but upto 5,00,00,000 58,12,500 + 30% 25% 4% Nil
Above 5,00,00,000 1,48,12,500 + 30% 37% 4% Nil

Income Tax Slab for Co-operative Society

Net Income Slab (Gross Taxable Income – deductions) Income Tax Rate Surcharge Health & Education Cess Rebate u/s 87A  (FY 2019-20)
Upto 10,000 10% Nil 4%l Nil
10,001 to 20,000 1,000+ 20% Nil 4% Nil
Above 20,000 but upto 1 crore 4,000+ 30% Nil 4% Nil
Above 1 crore 30% 12% 4% Nil

You may also like to read various Income Tax deductions u/s 80C.

Income Tax Slab for Partnership Firm/ LLP/ Local Authority

Net Income Slab (Gross Taxable Income – deductions) Income Tax Rate Surcharge Health & Education Cess Rebate u/s 87A  (FY 2019-20)
Upto 1 crore 30% Nil 4%l Nil
Above 1 crore 30,00,000+30% 12% 4% Nil

Income Tax Slab Rate for Companies for AY 2020-21

Income Tax Slab for Domestic Indian Company

1. Companies with gross receipts up to Rs. 400 crore

Net Income Slab (Gross Taxable Income – deductions) Income Tax Rate Surcharge Health & Education Cess Rebate u/s 87A  (FY 2019-20)
Upto 1 crore 25% Nil 4%l Nil
Above 1 crore but upto 10 crore 25,00,000+ 25% 7% 4% Nil
Above 10 crore 2,50,00,000+ 25% 12% 4% Nil

2. Companies with gross receipts more than Rs. 400 crore

Net Income Slab (Gross Taxable Income – deductions) Income Tax Rate Surcharge Health & Education Cess Rebate u/s 87A  (FY 2019-20)
Upto 1 crore 30% Nil 4%l Nil
Above 1 crore but upto 10 crore 30,00,000+ 30% 7% 4% Nil
Above 10 crore 3,00,00,000+ 30% 12% 4% Nil

A manufacturing company incorporated on or after 1st October 2019 may opt for the optional tax rate and can pay tax @ 15%.

The companies which do not avail of any exemption/incentive may also opt for the optional tax rate and they can pay tax @ 22%.

Income Tax Slab Rate For Foreign Companies

A company whose control and management situated wholly outside India.

In case of Royalty received from govt/Indian concern or technical fees as per agreement approved by the government

Net Income Slab (Gross Taxable Income – deductions) Income Tax Rate Surcharge Health & Education Cess Rebate u/s 87A  (FY 2019-20)
Upto 1 crore 50% Nil 4%l Nil
Above 1 crore but upto 10 crore 50,00,000+ 50% 2% 4% Nil
Above 10 crore 5,00,00,000+ 50% 5% 4% Nil

Any other Income

Net Income Slab (Gross Taxable Income – deductions) Income Tax Rate Surcharge Health & Education Cess Rebate u/s 87A  (FY 2019-20)
Upto 1 crore 40% Nil 4%l Nil
Above 1 crore but upto 10 crore 40,00,000+ 40% 2% 4% Nil
Above 10 crore 4,00,00,000+ 40% 5% 4% Nil

Marginal Relief for AY 2020-21

Marginal relief is given to the assessee who has to pay the surcharge (income category above Rs. 50 lakh).

The idea behind the marginal relief is that the increase in tax amount after adding surcharge should not be more than the amount of increase in income.

The relief is given to make a balance between the increase in income and an increase in tax.

For example, your total taxable income is Rs.51 lakh in a financial year, you have to pay a 10% surcharge applicable on taxable income between Rs. 50 lakh and 1 crore.

After reducing all the deductions, you’ll end up paying Rs. 13,42,500 as tax and the surcharge is Rs. 1,34,250. However, the surcharge amount here (1,34,250)  is more than the difference between increase in income that puts you in the higher tax slab (51,00,000 – 50,00,000 = 1,00,000)

To adjust this difference, the government offers marginal relief over surcharge. In this case, the net increase in income is Rs. 70,000 (Increase in income that is 1 lakh – 30% income tax).

Let’s take an example to understand better.

Mr.ABC who is 40 years old. whose total income is Rs.51,00,000/-. You can see tax calculation and marginal relief in the table below.

Income Calculation Amount
Up to Rs. 2,50,000 Nil  Nil
2,50,001 – 5,00,000 2,50,000 * 5% = 12,500 12,500
5,00,001 – 10,00,000 5,00,000 * 20% = 1,00,000 1,00,000
Above 10,00,000 Balance 41,00,000 * 30% =12,30,000 12,30,000
Total Tax Before Surcharge & CESS 13,42,500
Adding Surcharge 10% of 13,42,500 1,34,250
 (minus)

Marginal Relief*

Surcharge amount (1,34,250) > increase in income (1,00,000)Actual Surcharge = increase in income – 30% income tax, that is

1,00,000 – 30,000 = 70,000

Marginal relief = 1,34,250 – 70,000 = 64,550.

 – 64550
Tax Before CESS  14,12,200
CESS 4% of 14,12,200 = 56488 56,488
Total Tax Payable   14,68,688

So, the net income tax payable would be approx. 14,69,000. Total relief is approx 67,000 in the total taxable amount.

 

That’s all about the income tax slab 2019-20. Let me know (in comments) if you have any queries about income tax.

One Response

  1. Surya Apr 14, 2017

Leave a Comment!