May 07 ,2019

Income Tax Rates

Income tax slab rates for the for the Financial Year 2019-2020 (Assessment Year 2020-2021)

Resident individuals & non-resident indians

Income Threshold

Tax Rate

Up to Rs.2,50,000

NIL

Rs.2,50,000 to Rs.5,00,000

5%

Rs.5,00,000 to Rs.10,00,000

20%

Over Rs.10,00,000

30%

Senior citizens

Income Threshold

Tax Rate

Up to Rs.3,00,000

NIL

Rs.3,00,000 to Rs.5,00,000

5%

Rs.5,00,000 to Rs.10,00,000

20%

Over Rs.10,00,000

30%

Super senior citizens

Income Threshold

Tax Rate

Up to Rs.5,00,000

NIL

Rs.5,00,000 to Rs.10,00,000

20%

Over Rs.10,00,000

30%

 

Income Tax Rates remain unaltered for the FY 2019-2020. However Tax Rebate U/S 87A increased from Rs.2,500/- to Rs.12,500/-,Individuals with Taxable Income up to Rs 5 lacs will enjoy 100% tax rebate. Income Tax Slab Rates chart above shows the latest Tax rates applicable for the Financial Year 2019-2020 (Assessment Year 2020-21). Health & Education Cess is levied @ 4% on Income Tax payable. Standard Deduction re-introduced last year has been increased to Rs 50,000/-. Taxable Income along with exemption limit for Senior Citizens has been discussed below.

 

Increase in Standard Deduction for Salaried Individuals: Standard Deduction has been raised from Rs 40,000/- to Rs 50,000/- for the Financial Year 2019-2020. Standard Deduction was introduced in the Financial Year 2018-19 in lieu of Conveyance Allowance and Medical Reimbursement.

Standard Deduction is to be deducted from the Salary Income, prior to the calculation of Taxable Income.

Taxable Income = Gross Total Income – Deductions (Standard Deduction + Deduction Allowed Under Chapter VI-A of Income Tax Act)

Gross Total Income

Gross Total Income includes the aggregate income under the 5 heads of income, namely, Salary Income, Income from House Property, Income from Business or Profession, Capital Gains and Income from Other Sources.

Taxable Income

Taxable Income is derived from the Gross Total Income after subtracting eligible Deductions (Std.Deduction and Deductions allowed U/S 80C to U).

Tax Rebate under Section 87A

Individuals with Taxable Income up to Rs 5,00,000/- (5 lacs) will be eligible for tax benefit up to Rs 12,500/-. This implies that no tax is payable on taxable income up to 5 lacs. No Tax Rebate is available if Taxable Income exceeds Rs 5,00,000/-. Individuals may also reduce their Tax Liability by availing Deductions available under Chapter VI-A of the Income Tax Act (U/S 80C,D,E etc). Tax Deductions will be covered in a separate article.

Surcharge of 10% will be applicable on Income between Rs 50 lacs to Rs 1 crore.

Surcharge of 15% if the Total Income exceeds Rs 1 Crore.

Health and Education Cess of 4% is levied on Total Income Tax and on Surcharge if applicable.