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What is the income tax slab 2019-20?

dateKnowledge Centre Team dateNovember 10, 2020 views99 Views 4 Minute Read

What is the income tax slab 2019-20?

It is the duty of every individual earning in India to pay tax on the income to the government. The income tax paid by individuals is a major source of government revenues which is utilised to provide services and infrastructure to the citizens.

Most people are aware of tax deductions under Section 80C or exemptions like house rent allowance and leave travel allowance. If you are using any of these deductions and exemptions, you are paying your tax as per the income tax slab 2019. Let us take a detailed look at the income tax slab 2019 and the various deductions and exemptions available under the existing system.

The taxable income in India depends on the age of the taxpayer. The tax department has divided assesses into three categories—individuals below 60 years of age, between 60 and 80 and above 80 years of age. People between 60 and 80 years of age are called senior citizens, while those above 80 are known as super senior citizens. Income tax in the country has three primary components, the tax rate, cess and surcharge. Besides the tax rate applicable on various income slabs, you also have to pay cess and surcharge, if applicable.

The income tax slab 2019 for individuals below 60
  • An income up to Rs 2.5 lakh is exempted from taxes.
  • A tax of 5% has to be paid on an annual income between Rs 2.5 lakh and Rs 5 lakh. However, the government made income up to Rs 5 lakh essentially tax-free in the Interim Budget 2019. Individuals can avail tax rebate under Section 87A on income between Rs 2.5 lakh and Rs 5 lakh.
  • As per the income tax slab 2019, income between Rs 5 lakh and Rs 10 lakh is taxed at 20%. If income exceeds Rs 10 lakh, it is taxed at 30%.
For senior citizens

An annual income of up to Rs 3 lakh is exempted from taxes as compared to Rs 2.5 lakh for people below the age of 60.

Income between Rs 3 lakh and Rs 5 lakh is taxed at 5%, but you are eligible to receive tax rebate under Section 87A of the Income Tax Act, 1961. It makes an income up to Rs 5 lakh essentially tax-free.

Income between Rs 5 lakh and Rs 10 lakh is taxed at 20%.

Income over Rs 10 lakh is taxed at 30%.

For super senior citizens

  • An annual income up to Rs 5 lakh is exempted from income tax, even without any tax rebate.
    Income between Rs 5 lakh and Rs 10 lakh is taxed at 20%, while an income over Rs 10 lakh in a year will be taxed at 30%.
    Along with the tax, a health and education cess of 4% is applicable on all the income slabs of all categories of taxpayers.

The government levies an additional tax through a surcharge on high earners. Let us take a look at the surcharge for different income slabs.

  • For individuals with net income between Rs 50 lakh and Rs 1 crore, the surcharge is 10%.
  • Individuals with net income in the Rs 1 crore-Rs 2 crore range have to pay a surcharge of 15% on the amount of the income tax.
  • People whose net income exceeds Rs 2 crore but does not exceed Rs 5 crore have to pay a 25% surcharge on the amount of the income tax. If the net income exceeds Rs 5 crore, the surcharge on the amount of income tax rises to 37%.

Conclusion

The tax burden increases considerably due to various cess and surcharges that are levied along with the tax. However, you can also avail tax deductions on certain investments and reduce your tax liability. Investing in Canara HSBC Oriental Bank of Commerce Life Insurance iSelect Star Term Plan can help you avail a tax deduction of Up to Rs 1.5 lakh in a year under Section 80C.


Hello friends, I am Prince Doshi. I am a qualified and practicing chartered account for over 9 years and provide advisory services in the field of direct and indirect access audits, GST Implementation, MIS and More. Today I am here as a part of the tax video series initiative by Canara HSBC Oriental Bank of Commerce Life Insurance Company. In this video, we will discuss about the income tax slab rates applicable for financial year 2019-20,

Now we see income tax slab rates applicable for individual and HUF in the age group 61 years to 80 years, for income

0 to 3 lakhs, the applicable tax rate in nil.

From 3 to 5 lakhs, the tax rate is 5%

From 5 to 10 lakhs, the tax rate is 20%

Whereas above 10 lakhs, tax rate is 30%

Now, for individual having age 81 years and above, the tax rate are as under.

0 to 5 lakhs, the applicable tax rate in nil.

From 5 to 10 lakhs, the tax rate is 20%

Whereas above 10 lakhs, tax rate is 30%

In addition to the above income tax, surcharge and education cess are also applicable to all the assessee, surcharge is applicable only under following situation.

When income is above 50 lakhs till 1 crore the surcharge rate is 10%

When income is above 1 crore to 2 crore the surcharge rate is 15%

When income is above 2 crores to 5 crore the surcharge rate is 25%

Whereas as income above 5 crores attracts surcharge of 37%

In addition to the above education cess of 4% is applicable to all the taxpayers irrespective of their income, it is important to note that surcharge is applicable at the rate of 15% only.

In case of tax on income earned from short term capital gain under section 111A and long term capital gain under section 112A, even if the total income is over and above 2 crores.

We discussed about the normal tax rates, now there are some special taxes also applicable to taxpayers, there are as under.

Tax on short term capital gain earned under section 111A of income tax act attracts tax rate 15%

Tax on long term capital gains earned under section 112A of income tax act attracts 10% over and above rupees 1 Lakh.

Tax on income tax earned from section 112 of income tax act attracts tax at the rate of 10% without indexation or 20% with indexation.

Dividend income will attract tax rate of 10% over and above rupees 10 lakh of dividend, also there is a rebate of rupees 12500 available to all the taxpayers under section 87A in case the total income is less than rupees 5 lakhs.

Now let’s discuss income tax rates applicable to companies.

In case of domestic companies opting section 115BA of income tax act, where MAT is applicable and certain deductions are not allowed. The tax rate is 25% if gross receipts in financial year 2017-18 of the company are less than rupees 400 crores or tax rate is 30% if the gross receipts in financial year 17-18 are more than rupees 400 crore.

In addition to above surcharge at the rate of 7% will be applicable if the total income of the company is more than 1 crore but less than 10 Crore and in case where the income is more than 10 crores surcharge would at the rate of 12%.

In addition to above education cess at the rate of 4% will be applicable to the company.

In case of domestic companies opting section 115BAA where MAT is not applicable and certain deduction are also not allowed income tax rate is 22%, surcharge applicable is at the rate of 10% and education cess applicable is at the rate of 4% in this case, surcharge is applicable to the company irrespective of the income earned by the company.

In case of domestic manufacturing companies opting section 115BAB of income tax act where MAT is not applicable and certain deductions are not allowed and incorporated on or after 1 October 2019, the applicable tax rate is 15% surcharge applicable is 10% and education is 10% and education cess applicable is 4%, even in this case surcharge is applicable to the company irrespective of the income earned by the company.

In case of a foreign company applicable tax rate is 40%, surcharge applicable is 2% in case income is earned between 1 crore to 10 crore and surcharge is applicable at the rate of 5% in case income is earned more than 10 crore, education cess at the rate of 4% shall be applicable to the foreign company as well.

For partnership firms and LLPs, the applicable tax rate would be 30% surcharge applicable would be 12% in case the total income of partnership firm is more than rupees 1 crore and education cess at the rate of 4% shall be applicable.

In case of co-operative societies when the total income is 0-10,000 the tax rate is 10% from 10,000-20,000 tax rate is 20% and over and above 20,000 tax rates applicable is 30%, surcharge at the rate of 12% is applicable to co-operative society if their total income is over and above rupees 1 Crore education cess at the rate of 4% shall anyways be applicable to co-operative societies also.

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