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Here are the latest income tax slabs and rates

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Last Updated: Feb 19, 2020, 12.22 PM IST
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These are the latest income tax slabs applicable to individuals.

Highlights

  • Budget 2018 only increased total cess on income tax to 4% but made no change in the existing tax slabs and income tax rates.
  • The basic exemption limit for an individual depends on his/her age as well as his/her residential status.
Tax Calculator
Budget 2020 has proposed to introduce new income tax slabs with reduced rates for those foregoing exemptions and deductions under a "simplified tax regime". This new system is optional and will co-exist with the old one with three slabs and various exemptions and deductions available to the taxpayer.

As per the budget proposals, if a taxpayer opts for the new regime, then his income will be taxed as per the following tax slabs:
Total income (Rs)

Income tax rate

Up to 2.5 lakh

Nil

From 2,50,001 to Rs 5,00,000

5 percent

From 5,00,001 to Rs 7,50,000

10 percent

From 7,50,001 to 10,00,000

15 percent

From 10,00,001 to Rs 12,50,000

20 percent

From 12,50,001 to 15,00,000

25 percent

Above 15,00,000

30 percent


Individuals with a net taxable income of up to Rs 5 lakh will be able to avail tax rebate of Rs 12,500 under section 87A in both, the existing and new, tax regimes. Effectively, this would mean that individual taxpayers having net taxable income of up to Rs 5 lakh will continue to pay zero tax.

However, individuals opting for the new tax regime would not be able to avail common tax breaks such deductions under section 80C for maximum of Rs 1.5 lakh by investing in specified instruments, section 80D for medical insurance paid, house rent allowance, leave travel allowance etc.

Also Read: 70 exemptions that you lose out in new tax regime

On the other hand, individuals opting for the existing tax regime will continue to pay tax on their income in FY 2020-21 same as FY 2019-20. These tax proposals will come into effect from April 1, 2020, once these are passed by the Parliament.

Abhishek Soni, CEO, Tax2win.in, an ITR filing website says, "If senior citizens or super senior citizens are opting for new tax regime then the benefit of higher exemption limit will not be available i.e. limit of higher exemption of INR 3 lakh in case of senior citizens and INR 5 lakh in case of super senior citizens will not be available under the new optional regime. Therefore, under the new tax regime, basic exemption limit will remain INR 2.5 lakh for all taxpayers."

Given below are the latest income tax slabs applicable for financial year 2019-20 (assessment year 2020-21).

The basic tax exemption limit for an individual depends on their age and residential status. According to age, resident individual taxpayers are divided into three categories:

1. Resident individuals below the age of 60 years
2. Resident senior citizens above 60 years but below 80 years
3. Resident super senior citizens above the age of 80 years

Here is a look at the latest income tax slabs for FY 2018-19 and FY 2019-20.

Income tax slabs for resident individual below 60 years of age
Taxable income slabsIncome tax rates and cess
Up to Rs 2.5 lakhNil
Rs 2,50,001 to Rs 5,00,0005% of (Total income minus Rs 2,50,000) + 4% cess
Rs 5,00,001 to Rs 10,00,000Rs 12,500 + 20% of (Total income minus Rs 5,00,000) + 4% cess
Rs 10,00,001 and aboveRs 1,12,500 + 30% of (Total income minus Rs 10,00,000) + 4% cess

Income tax slabs for resident individual between 60 and 80 years of age (Senior Citizen)
Taxable income slabsIncome tax rates and cess
Up to Rs 3 lakhNil
Rs 3,00,001 to Rs 5,00,0005% of (Total income minus Rs 3,00,000) + 4% cess
Rs 5,00,001 to Rs 10,00,000Rs 10,000 + 20% of (Total income minus Rs 5,00,000) + 4% cess
Rs 10,00,001 and aboveRs 1,10,000 + 30% of (Total income minus Rs 10,00,000) + 4% cess

Income tax slabs for resident individual above 80 years of age (Super Senior Citizen)
Taxable income slabsIncome tax rates and cess
Up to Rs 5 lakhNil
Rs 5,00,001 to Rs 10,00,00020% of (Total income minus Rs 5,00,000) + 4% cess
Rs 10,00,001 and aboveRs 1,00,000 + 30% of (Total income minus Rs 10,00,000) + 4% cess

As per the Budget 2019 announcement, no changes in the income tax slabs and rates have been proposed. A rebate of Rs 12,500 will be available for all taxpayers with taxable income up to Rs 5 lakh. This rebate will be available under Section 87A of the Income Tax Act. Also, standard deduction for financial year 2019-20 would be Rs 50,000.

For the FY 2019-20, new surcharge rates have been introduced for the super rich.

Surcharges to be levied for FY 2019-20:
Taxable Income Surcharge (%)
Income above Rs 50 lakh but below Rs 1 crore 10
Income above Rs 1 crore but below Rs 2 crore 15
Income above Rs 2 crore but below 5 crore 25
Income above Rs 5 crore 37

For non-resident individuals (NRI), the basic exemption limit is of Rs 2.5 lakh in a financial year irrespective of their age. Surcharge as mentioned in the table above will be levied on the taxable income.

In Budget 2018, cess on income tax was increased to 4 per cent for FY 2018-19 onwards from 3 per cent for FY 2017-18 across the board for taxpayers. Due to the hike in cess, the tax liability for the highest slab (assuming an income of Rs 15 lakh) has increased by Rs 2,625. In the middle income tax slab, the tax outgo increases by Rs 1,125, and there is a nominal increase in the tax liability of Rs 125 for lowest income tax slab.

Here's how much your income tax liability will be:

Post-Budget-Tax1

Post-Budget-Tax2

Post-Budget-Tax3

Click here to use our Income Tax Calculator

As per the current income tax slabs, taxation of income of resident individuals below 60 years is as follows: Income up to Rs 2.5 lakh is exempt from tax, 5 per cent tax on income between Rs 250,001 to Rs 5 lakh; 20 per cent tax on income between Rs 500,001 and Rs 10 lakh; and 30 per cent tax on income above Rs 10 lakh.

For senior citizens (aged 60 years or above but less than 80 years), income up to Rs 3 lakh is exempt from tax. Income from Rs 300,001 to Rs 5 lakh is taxed at 5 per cent, from Rs 500,001 to Rs 10 lakh at 20 per cent and above Rs 10 lakh at 30 per cent.

For super senior citizens, aged 80 years and above, income up to Rs 5 lakh is exempt from tax. Income from Rs 500,001 to Rs 10 lakh is taxed at 20 per cent and above Rs 10 lakh is taxed at 30 per cent.

Income tax slabs for FY 2017-18
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After taking the deductions under Section 80 (C) to 80 (U), the tax is payable after adding the cess and surcharge, if applicable.

  1. How is tax liability calculated?
    The tax liability is calculated on the income arrived at after availing all the deductions and other tax-exemptions available to the individual.
  2. How to calculate total income?
    To calculate your total income, you must add the income received from various sources such as salary, pension, interest received from fixed deposit, recurring deposit, savings account and so on.
  3. How do I know my tax payment details?
    Once the tax is deposited by you or any other individual has deducted tax and deposited with the government on your behalf, then total amount of tax deposited against your PAN will be reflected in Form 26AS. You can download the statement from your account on the income tax e-filing website.
  4. How can I pay taxes?
    A taxpayer can pay tax offline or online. For offline method, an individual is required to visit the bank branch and pay the tax due along with duly filled challan. Another way is paying taxes online using Net banking facility of any of the authorised banks.
Click here for all the information and analysis you need for tax-saving this financial year

Also Read

New income tax slabs: Will you gain by switching to new regime?

Six income tax slabs in, 70 exemptions out: Impact on taxpayers

No cut in income-tax slabs in Budget can be a disappointment: Neeraj Dewan

Will proposed new income tax slabs rates benefit senior citizens? Here’s the answer

Budget 2020 should cut income tax slabs, offer tax breaks to boost investment: EY

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