Income Tax Slab Rates for FY 2019-20 & AY 2020-21

Every year tax payers need to make a note of changes announced in the budget that reflect in the income tax e-filing forms. Many filing details remain unchanged, whereas there may be changes in a few. The income tax slab rates specify the threshold yearly limits at which a higher a lower tax rate is applicable. According to the budget released in 2019 there have been some changes in the structure of the tax slab In the interim budget 2019 the tax rebate of Rs.12,500 under Section 87A of IT Act. 1961 is available to the individuals who have a yearly income up to Rs. 5 lakhs. Income tax rates differ for age groups and income slabs. 

The income tax rates are first categorized across age groups then cross-categorized across age group income to generate tax rate slabs. The following paragraphs discuss the income tax rates for age/income slab matrix.

Some of the Highlights of Income Tax Slab Rates for FY 2019-20 (Assessment Year 2020-21)

Income Tax slab rates help you decide whether your income is taxable or not. The finance minister has introduced many changes in the income tax slab rate for financial year 2019-2020 (AY 2020-2021). These are:

• No tax is applicable for individuals whose income is less than Rs.2,50,000
• 0%-5% tax is applicable for different age group with income from Rs.2,50,000- Rs.5,00,000.
• 20% tax is applicable with income from Rs.5,00,000-Rs10,00,000.
• 30% tax is applicable with income from Rs.5,00,000-Rs10,00,000.
• Investment up to maximum Rs.1.5 lakh is applicable for tax exemption under section 80C of Income Tax Act and can save up to Rs.46,800 in taxes.

Based on the annual income earned by an individual, the following table shows different income tax rates applicable in India. The tax slabs have been arranged by the category and profile of the tax payers. 

The individual tax payers are divided into 3 categories and 1 for domestic companies. Let’s take a look at the list of these categories.      

• Hindu Undivided Family (HUF) and Individuals less than 60 years old.
• Senior citizen with age limit of 60 years and above, but less than 80 years old.
• Senior citizen who are 80 or above 80 years old.
• Domestic companies

Income Tax Slab/Brackets Applicable for FY 2019-20

Income tax is a tax imposed by the government on the income earned by individuals and businesses. One must file an income tax return to justify his/her income. In this regard, to avail tax advantages to its fullest, it is crucial to understand the existing income tax slab for the fiscal year 2019-20.

Income Tax Slab Rates for Hindu Undivided Family (HUF) – Part (I)

Additional Component

Surcharge:

• 10% surcharge is applicable in case the income of an individual is more than Rs.50,00,000 and less than Rs.1,00,00,000.
• 15% Surcharge is applicable in case the income of an individual is more than Rs.1,00,00,000.
• Under budget 2019 the tax rebate of Rs.12,500 under Section 87A of IT Act 1961 is available to the individuals who have a yearly income up to Rs.5 lakhs.

Health and Education Cess:

Health and education cess of 4% is applicable on the amount of tax calculated, inclusive of surcharge.

Income Tax Slab Rate for Individuals below 60 Years Old and Other Artificial Judicial Person- part (I)

Additional Component

• 10% surcharge is applicable in case the income of an individual is more than Rs.50,00,000 and less than Rs.1,00,00,000.
• 15% Surcharge is applicable in case the income of an individual is more than Rs.1,00,00,000.

Health and Education Cess:

• Health and education cess of 4% is applicable on the amount of tax calculated, inclusive of surcharge.

Income Tax Slab Rates of Senior Citizen who are 60 years old or more, but less than 80 years old- Part (II):

Additional Component

• 10% surcharge is applicable in case the income of an individual is more than Rs.50,00,000 and less than Rs.1,00,00,000.
• 15% Surcharge is applicable in case the income of an individual is more than Rs.1,00,00,000.

Health and Education Cess:

• Health and education cess of 4% is applicable on the amount of tax calculated, inclusive of surcharge.

Income Tax Slab Rate for Super Senior citizen who are 80 years or more than 80 years old- Part (III)

Additional Component

• 10% surcharge is applicable in case the income of an individual is more than Rs.50,00,000 and less than Rs.1,00,00,000.
• 15% Surcharge is applicable in case the income of an individual is more than Rs.1,00,00,000.

Health and Education Cess:

• Health and education cess of 4% is applicable on the amount of tax calculated, inclusive of surcharge.

Income Tax Slab Rates for Domestic Companies

Additional Rates which are Applicable:

Cess: 4% of corporate tax

• Surcharge:  If the taxable income is more than Rs.1 crore but less than Rs.10 crore than a surcharge of 7% of income tax is applicable.
• Surcharge: If the taxable income is more than Rs.10 crore than a surcharge of 12% of income tax is applicable.

Partnership Firms

30% tax rate is applicable for any partnership firms & limited liability partnership (LLP).

Additional Component

Surcharge is applicable if the taxable income is more than Rs.10 crore than a surcharge of 12% of income tax is applicable.

Health and Education Cess:

Health and education cess of 4% is applicable on the amount of tax calculated, inclusive of surcharge.

Local Authorities/Entity

30% tax rate is applicable for local authorities.

Additional Component

Surcharge is applicable if the taxable income is more than Rs.10 crore than a surcharge of 12% of income tax is applicable.

Health and Education Cess:

Health and education cess of 4% is applicable on the amount of tax calculated, inclusive of surcharge.

Income Tax Slab and Rates for Foreign Companies/Entity

Additional Component

• 2% surcharge is applicable in case the income is between Rs.1 crore- Rs. 10 crore.
• 5% surcharge is applicable in case the income is above Rs.10 crore.

Income Tax Slab Rates for Co-operative Societies

Rural/Urban/Semi Urban excluding Agricultural Societies and Self Help Group (SHG)

Additional Component

In case the taxable income is more than Rs.1crore than a surcharge of 12% of income tax is applicable.

Health and Education Cess:

Health and education cess of 4% is applicable on the amount of tax calculated, inclusive of surcharge.

Comparison of Income Tax Slab FY 19-20 VS FY 18-19

Income Tax Slab for HUF and individuals less than 60 years of age.

Key Comparison

• For financial year 2019-2020 and assessment year 2020-2021, the income tax slab has remained unchanged for all the citizens (including senior citizen).
• The education cess of 4% on income tax is same as previous year.
• Standard deduction for salaried individuals has been increased from Rs.40,000-Rs50,000.
• No changes have been made in the corporate tax. Corporate tax applicable is 25% for domestic companies whose turnover is up to Rs. 250 crore.
• 10% tax on long-term capital gain exceeding Rs 1 Lakh.
• Short-term capital gains to continue to be taxed at 15%

For Senior Citizens

• Zero TDS on interest earned from FDs up to Rs 50,000
• Tax exemption on interest from FD, Post Office up to RS 50,000 as per the Section 80TTB
• Premium paid for senior citizen medical insurance is exempted up to Rs. 50,000
• As per Section 80DDB, tax exemption for certain critical illnesses up to Rs. 60,000 in case of senior citizens, up to Rs. 80,000 in case of super senior citizens and Rs. 1 Lakh in case of all senior citizen

Income Tax Slab and Rates on Dividend

Income tax is applicable on dividend income received by the individual based on the source of dividend income.

Income tax Slab Rates for NRI

For financial year 2019-2020, the income tax slab rates are following:

Health and Education Cess:

Health and education cess of 4% is applicable on the amount of tax calculated, inclusive of surcharge.

Income Tax Slab Rates for Expats

For financial year 2019-2020, the income tax slab rates are following:

Income Tax Slab and Rates for Freelancers

Income tax slab rates for freelancers are same as individuals and HUFs.

Surcharge:

• 10% surcharge is applicable in case the income of an individual is more than Rs.50,00,000 and less than Rs.1,00,00,000.
• 15% Surcharge is applicable in case the income of an individual is more than Rs.1,00,00,000.

Health and Education Cess:

Health and education cess of 4% is applicable on the amount of tax calculated, inclusive of surcharge.

Income tax Slab Rates for Doctors

Income tax rates for doctors are same as of salaried individuals.

Surcharge:

• 10% surcharge is applicable in case the income of an individual is more than Rs.50,00,000 and less than Rs.1,00,00,000.
• 15% Surcharge is applicable in case the income of an individual is more than Rs.1,00,00,000.

Health and Education Cess:

Health and education cess of 4% is applicable on the amount of tax calculated, inclusive of surcharge.

Income Tax Act, 1961

Income Tax Act 1961 consists of the provisions of income tax which is applicable uniformly to the whole of India and is effective since 1962. The Income Tax Act contains different provisions to determine tax liability, taxable income, procedure for assessment of penalties, etc.

Key factors based on which income tax rates are applicable include:

• Resident status of the assesse
• Income of assesse
• Rate of tax
• Assessment year
• Gross income
• Charge of Income Tax

Income Tax Slab is applicable to

• A Hindu Undivided Family (HUF)
• Any salaried individual.
• A firm
• A company
• Any local authority
• A body of individual (BOI)or an association of person whether incorporated or not.

Income Tax Slab Rates for Financial year 2018-2019 (AY 2019-2020)

Income tax slab rates for individual tax payers & Hindu Undivided Family (HUF) (Less than 60 years of age) FY 18-19 (Part 1)

Additional Component

Individuals can make investment and save up to Rs.46,800 on taxes.

Surcharge:

• 10% surcharge is applicable in case the income of an individual is more than Rs.50,00,000 and less than Rs.1,00,00,000.
• 15% Surcharge is applicable in case the income of an individual is more than Rs.1,00,00,000.

Health and Education Cess:

Health and education cess of 4% is applicable on the amount of tax calculated, inclusive of surcharge.

* For FY 2018-2019, the limit of tax exemption is up to Rs.2.5 lakhs for individuals and Hindu Undivided Family (HUF), except for those who are covered under part (II) and Part (III).

Income Tax Slab Rates of Senior Citizen who are 60 years old or more, but less than 80 years old- For FY 2018-19- Part (II):

Additional Component

• Individuals can make investment and save up to Rs.46,800 on taxes.
• 10% surcharge is applicable in case the income of an individual is more than Rs.50,00,000 and less than Rs.1,00,00,000.
• 15% Surcharge is applicable in case the income of an individual is more than Rs.1,00,00,000.

* For FY 2017-2018, the tax exemption limit is up to Rs.3 lakhs except for those who are covered under part (I) and Part (III).

Income Tax Slab Rate for Super Senior citizen who are 80 years or more than 80 years old-  for FY 2017-18-Part (III)

Additional Component

• Individuals can make investment and save up to Rs.46,800 on taxes.
• 10% surcharge is applicable in case the income of an individual is more than Rs.50,00,000 and less than Rs.1,00,00,000.
• 15% Surcharge is applicable in case the income of an individual is more than Rs.1,00,00,000.

* For FY 2017-2018, the tax exemption limit is up to Rs.5 lakhs except for those who are covered under part (I) and Part (II).

Income tax Slab Rates for Domestic Companies for FY 2017-18- (Part IV)

Additional Rates which are Applicable:

Cess: 3% of corporate tax

• Surcharge:  If the taxable income is more than Rs.1 crore but less than Rs.10 crore than a surcharge of 7% of income tax is applicable.
• Surcharge: If the taxable income is more than Rs.10 crore than a surcharge of 12% of income tax is applicable.

Therefore, it is suggested to opt for either of the tax regimes after assessing the tax slabs and the income group that you fall into. If you are an avid tax planner it makes sense to stick to the old one.

New Income Tax Slab Rate Table For FY 2020 - 2021

In the new tax regime the tax slabs are kept the same for the income group up to Rs. 5 lakhs. Here is the table with the old and new tax rate as applicable on the annual income:

Income Tax Slab in India - FAQs