Income Tax Slabs & Tax Rate in India 2019-20

Last Updated at: May 30, 2020
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Latest Update

 

Budget 2020 has proposed to introduce new income tax slabs sans 70 deductions and tax exemptions. However, individuals having net taxable income up to Rs 5 lakh will be eligible for rebate up to Rs 12, 500 under both the tax regimes.

Income Tax slabs & Tax Rates in India 2019-20
In India, income tax is levied on individual taxpayers on the basis of a slab system, where different tax rate has been prescribed for different slab and such tax 4 senses of rate keep increasing with an increase in the income slab.

 

Income tax is referred to as a “progressive tax”. It is imposed by the Indian government on the basis of earnings of individuals falling within different tax brackets.

The rate of income tax is charged in accordance with the income tax slab system. Income tax slab indicates the annual income limits of an individual and the rates at which such income will be chargeable. The tax rates increase with the increase in income of an assessee.

File Your Income Tax Returns

The latest Income Tax slabs and rates for FY 2019-20 are mentioned below:

  1. For HUFs (Hindu Undivided Family) & Resident Individuals below the age of 60 years

Range of Income               Rate of Income Tax and Cess Applicable

Up to 2.5 lakh              No tax
From 2.5 lakh to 5 lakh 5% of total income that is exceeding 2.5 lakh + 4% cess
From 5 lakh to 10 lakh            12,500+ 20% of total income that is exceeding 5 Lakh + 4% Cess
More than 10 lakh                   1,12,500 + 30% of total income that is exceeding 10 Lakh + 4% Cess

            

  1. For Resident Individuals above 60 years of age but below 80 years (Senior Citizens)

Range of Income                 Rate of Income Tax and Cess applicable

Up to 3 lakh                 No Tax
From 3 lakh to 5 lakh  5% of total income that is exceeding 2.5 lakh + 4% Cess
From 5 lakh to 10 lakh            10,500+ 20% of total income that is exceeding 5 lakh + 4% Cess
More than 10 lakh                   1,10,000 + 30% of total income that is exceeding 10 lakh + 4% Cess

 

  1. For Resident Individuals above 80 years of age ( Super Senior Citizens) 

Range of Income                Rate of Income Tax and Cess applicable

Up to 5 lakh                 No Tax
From 5 lakh to 10 lakh            20% of total income that is exceeding 5 lakh + 4% Cess
More than 10 lakh                   1,00,000 + 30% of total income that is exceeding 10 lakh + 4% Cess

 

Additional points:

10% surcharge shall be applicable, where the net income of any individual is more than 50 Lakh but less than 1 crore

15% surcharge shall be applicable, where the net income of any individual is more than 1 crore.

Income Tax Slabs for Partnership Firms:

There is a fixed tax rate for Partnership Firms and LLPs (Limited Liability Partnerships) and they are liable to pay the Income Tax at the rate of 30%.

Added to the tax amount is:
  • Surcharge on tax: 12% in cases where the annual income exceeds Rs.1 Crore
  • Cess for Health & Education:  At the rate of 4% – calculated on tax amount + surcharge

Income Tax Slabs for Local Authorities:

Local Authorities are also liable to pay tax at a flat tax rate of 30%.

Added to the tax amount is:
  • Surcharge on tax: 12% in cases where the annual income is exceeding Rs.1 Crore
  • Cess for Health & Education:  At the rate of 4% – calculated on tax amount + surcharge
  1. For Domestic companies

Range of Turnover                                                     Rate of Corporate Tax and Cess applicable

Gross Turnover to a maximum of 250 Crore in the previous year     25% + 4% Cess
Gross Turnover above 250 Crore in the previous year   30% 4% Cess

 

Additional points to remember:

7% surcharge shall be applicable, where taxable income is more than 1 Crore but less than 10 crore

12% surcharge shall be applicable, where taxable income is more than 10 crore.

Income Tax Slabs for Foreign Companies:

Foreign Companies are taxed at the slab rate of 40%.

Added to the tax amount is:
  • Surcharge on tax:
    •  2% in cases where the annual income is between Rs.1 Crore to Rs.10 Crore
    • 5% in cases where the annual income is more than Rs.10 Crore.
  • Cess for Health & Education: At the rate of 4% – calculated on tax amount plus surcharge

    Income Tax Slabs for Co-operative Societies:

Slab (Income Tax) Slab Rate (Income Tax)
Up to Rs.10,000 10% of Income
Rs.10,000 to Rs.20,000 20% of Income exceeding Rs.10,000
Over Rs.20,000 30% of Income exceeding Rs.20,000

Added to the tax amount is:

  • Surcharge on tax: 12% in cases where the annual income is exceeding Rs.1 Crore.

  • Cess for Health & Education: At the rate of 4% – calculated on tax amount + surcharge

And, in order to calculate your tax liability for the year, you can keep track of your taxable income and figure out what income bracket you are going to fall into for the year 2019 – 2020.

Impact on an individual’s financial planning due to changes in Income Tax rules:

Tax rebate: As per Section 87A, Individuals having a net taxable income up to Rs. 5Lakh are eligible to get 100% tax rebate, that is, they would pay zero tax. The maximum amount of tax rebate has increased from Rs. 2,500 to Rs. 12,500. This, in turn, is a piece of good news for the middle-class taxpayers.    

Hike in standard deduction: There’s a sigh of relief for the pensioners and salaried employees as the standard deduction limit has elevated up to a fixed deduction of Rs. 50,000/-.As a result, their income tax liability shall decrease.

No tax on notional rent: Notional Rent is the rent which an individual earns on letting out his property. As per new tax rules, under Section 23, no income tax shall be charged on notional rent received from a second home. Therefore, two houses can be declared as self-occupied without any tax payment. 

Rise in TDS limit: The TDS (tax deducted at source) limit on the interest income from bank/post office deposits has increased from Rs. 10,000/- to Rs. 40,000/-. This means that the banks shall not deduct TDS on interest income of up to Rs. 40,000/- substantially benefiting the low-income group reducing their paperwork.

Long-term capital gain tax: From the fiscal FY 2019-20, one can avail capital gains deduction to buy two houses, provided the amount of capital gain is up to Rs. 2 crores. This benefit can be utilized by the assessee only once in his lifetime.  

It is always better that one should use an Income Tax Calculator to know his Taxable Income and calculate the amount of Income Tax payable

 

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Income Tax Slabs & Tax Rate in India 2019-20

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In India, income tax is levied on individual taxpayers on the basis of a slab system, where different tax rate has been prescribed for different slab and such tax 4 senses of rate keep increasing with an increase in the income slab.

 

Income tax is referred to as a “progressive tax”. It is imposed by the Indian government on the basis of earnings of individuals falling within different tax brackets.

The rate of income tax is charged in accordance with the income tax slab system. Income tax slab indicates the annual income limits of an individual and the rates at which such income will be chargeable. The tax rates increase with the increase in income of an assessee.

File Your Income Tax Returns

The latest Income Tax slabs and rates for FY 2019-20 are mentioned below:

  1. For HUFs (Hindu Undivided Family) & Resident Individuals below the age of 60 years

Range of Income               Rate of Income Tax and Cess Applicable

Up to 2.5 lakh              No tax
From 2.5 lakh to 5 lakh 5% of total income that is exceeding 2.5 lakh + 4% cess
From 5 lakh to 10 lakh            12,500+ 20% of total income that is exceeding 5 Lakh + 4% Cess
More than 10 lakh                   1,12,500 + 30% of total income that is exceeding 10 Lakh + 4% Cess

            

  1. For Resident Individuals above 60 years of age but below 80 years (Senior Citizens)

Range of Income                 Rate of Income Tax and Cess applicable

Up to 3 lakh                 No Tax
From 3 lakh to 5 lakh  5% of total income that is exceeding 2.5 lakh + 4% Cess
From 5 lakh to 10 lakh            10,500+ 20% of total income that is exceeding 5 lakh + 4% Cess
More than 10 lakh                   1,10,000 + 30% of total income that is exceeding 10 lakh + 4% Cess

 

  1. For Resident Individuals above 80 years of age ( Super Senior Citizens) 

Range of Income                Rate of Income Tax and Cess applicable

Up to 5 lakh                 No Tax
From 5 lakh to 10 lakh            20% of total income that is exceeding 5 lakh + 4% Cess
More than 10 lakh                   1,00,000 + 30% of total income that is exceeding 10 lakh + 4% Cess

 

Additional points:

10% surcharge shall be applicable, where the net income of any individual is more than 50 Lakh but less than 1 crore

15% surcharge shall be applicable, where the net income of any individual is more than 1 crore.

Income Tax Slabs for Partnership Firms:

There is a fixed tax rate for Partnership Firms and LLPs (Limited Liability Partnerships) and they are liable to pay the Income Tax at the rate of 30%.

Added to the tax amount is:
  • Surcharge on tax: 12% in cases where the annual income exceeds Rs.1 Crore
  • Cess for Health & Education:  At the rate of 4% – calculated on tax amount + surcharge

Income Tax Slabs for Local Authorities:

Local Authorities are also liable to pay tax at a flat tax rate of 30%.

Added to the tax amount is:
  • Surcharge on tax: 12% in cases where the annual income is exceeding Rs.1 Crore
  • Cess for Health & Education:  At the rate of 4% – calculated on tax amount + surcharge
  1. For Domestic companies

Range of Turnover                                                     Rate of Corporate Tax and Cess applicable

Gross Turnover to a maximum of 250 Crore in the previous year     25% + 4% Cess
Gross Turnover above 250 Crore in the previous year   30% 4% Cess

 

Additional points to remember:

7% surcharge shall be applicable, where taxable income is more than 1 Crore but less than 10 crore

12% surcharge shall be applicable, where taxable income is more than 10 crore.

Income Tax Slabs for Foreign Companies:

Foreign Companies are taxed at the slab rate of 40%.

Added to the tax amount is:
  • Surcharge on tax:
    •  2% in cases where the annual income is between Rs.1 Crore to Rs.10 Crore
    • 5% in cases where the annual income is more than Rs.10 Crore.
  • Cess for Health & Education: At the rate of 4% – calculated on tax amount plus surcharge

    Income Tax Slabs for Co-operative Societies:

Slab (Income Tax) Slab Rate (Income Tax)
Up to Rs.10,000 10% of Income
Rs.10,000 to Rs.20,000 20% of Income exceeding Rs.10,000
Over Rs.20,000 30% of Income exceeding Rs.20,000

Added to the tax amount is:

  • Surcharge on tax: 12% in cases where the annual income is exceeding Rs.1 Crore.

  • Cess for Health & Education: At the rate of 4% – calculated on tax amount + surcharge

And, in order to calculate your tax liability for the year, you can keep track of your taxable income and figure out what income bracket you are going to fall into for the year 2019 – 2020.

Impact on an individual’s financial planning due to changes in Income Tax rules:

Tax rebate: As per Section 87A, Individuals having a net taxable income up to Rs. 5Lakh are eligible to get 100% tax rebate, that is, they would pay zero tax. The maximum amount of tax rebate has increased from Rs. 2,500 to Rs. 12,500. This, in turn, is a piece of good news for the middle-class taxpayers.    

Hike in standard deduction: There’s a sigh of relief for the pensioners and salaried employees as the standard deduction limit has elevated up to a fixed deduction of Rs. 50,000/-.As a result, their income tax liability shall decrease.

No tax on notional rent: Notional Rent is the rent which an individual earns on letting out his property. As per new tax rules, under Section 23, no income tax shall be charged on notional rent received from a second home. Therefore, two houses can be declared as self-occupied without any tax payment. 

Rise in TDS limit: The TDS (tax deducted at source) limit on the interest income from bank/post office deposits has increased from Rs. 10,000/- to Rs. 40,000/-. This means that the banks shall not deduct TDS on interest income of up to Rs. 40,000/- substantially benefiting the low-income group reducing their paperwork.

Long-term capital gain tax: From the fiscal FY 2019-20, one can avail capital gains deduction to buy two houses, provided the amount of capital gain is up to Rs. 2 crores. This benefit can be utilized by the assessee only once in his lifetime.  

It is always better that one should use an Income Tax Calculator to know his Taxable Income and calculate the amount of Income Tax payable

 

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