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Income Tax Slab

Income Tax Slab 2019-20

Last Updated 19th Sep 2020

Income range per annum Tax Rate as per Old Regime Tax Rate as per New Regime
Upto ₹ 2.50 Lakh No Tax No tax
₹ 2.50 Lakh – ₹ 5 Lakh 5% 5%
₹ 5 Lakh – ₹ 7.50 Lakh 20% 10%
₹ 7.50 Lakh – ₹ 10 Lakh 20% 15%
₹ 10 Lakh – ₹ 12.50 Lakh 30% 20%
₹ 12,50,000 – ₹ 15,00,000 30% 25%
Above ₹ 15,00,000 30% 30%
INCOME TAX CALCULATOR

Tax Slabs 2019-20

The calculation of income tax in India is done based on applying different tax rates to different annual income groups, which are called slabs. For calculating income tax, first of all, actual annual taxable income is calculated as per the provisions of various sections in the Income Tax Act, providing for different income inclusions and exclusions for the same.

What are Income Tax Slabs?

The government imposes Income Tax on all incomes generated by individuals and businesses as per the income generated by them. These ranges of incomes are known as Income Tax Slabs. As per Income Tax Act 1961, these tax slabs change from year to year and are bifurcated according to age, income level and gender.

Presently, Income Tax Slabs can be categorised as follows:

  • Individuals have to pay nil taxes on the income generated by them.
  • An Income Tax slab of 5 % is levied on specified incomes.
  • Income is chargeable at 10%, 15%, 20%, 25% and 30% as per Income Tax Slab 2020.

Income Tax Slabs for Resident Individuals

For an Indian Resident Income Tax Slabs has been categorised according to the age and income level. For Indian residents below 60 years of age, Income tax slabs range from Nil to 30%. Below mentioned are Income Tax Slabs for the year 2020-2021.

Tax Slab for Individuals below 60 Years of Age

Income range per annum New Slabs for FY 2020-21, AY 2021-22 Old Slabs, mandatory upto FY 2019-20 and optional from FY 2020-21
Upto ₹ 2.50 Lakh No Tax No tax
Above ₹ 2.50 Lakh to ₹ 5 Lakh 5% 5%
Above ₹ 5 Lakh to ₹ 7.50 Lakh 10% 20%
Above ₹ 7.50 Lakh to ₹ 10 Lakh 15% 20%
Above ₹ 10 Lakh to ₹ 12.50 Lakh 20% 30%
Above ₹ 12.50 Lakh to ₹ 12.50 Lakh 25% 30%
Above ₹ 15 Lakh 30% 30%
Rebate under section 87(A) 100% tax rebate subject to maximum of ₹ 2,500 available to resident individual whose total income does not exceed ₹ 35 Lakh 100% tax rebate subject to maximum of ₹ 2,500 available to resident individual whose total income does not exceed ₹ 3.50 Lakh

Cess at 4% of tax applicable in all cases. Surcharge at 10% for income above ₹ 50 Lakh and at 15% for income above ₹ 1 Cr.

A rebate of ₹ 12,500 is available under the old income tax regime, whereas the same rebate is available in the new income tax regime if the annual taxable income does not exceed ₹ 5 Lakh.

The total reduction in tax liability will range from ₹ 25,000 for a person earning ₹ 7.50 Lakh per annum to ₹ 75,000 for a person earning ₹ 15 Lakh or more per annum under the new tax slabs. However, the actual savings will be lower if one were to include the impact of fore-going exemptions under the new tax regime.

Income Tax Slab for Senior Citizens (age more than 60 years but less than 80 years FY 2019-20)

Income range per annum New Slab for FY 2020-21, AY 2021-22 Tax Rate FY 2019-20, AY 2020-21
Upto ₹ 3 Lakh No Tax No Tax
Above ₹ 3 Lakh to ₹ 5 Lakh 5% 5%
Above ₹ 5 Lakh to ₹ 7.50 Lakh 10% 20%
Above ₹ 7.50 Lakh to ₹ 10 Lakh 15% 20%
Above ₹ 10 Lakh to ₹ 12.50 Lakh 20% 30%
Above ₹ 12.50 Lakh to ₹ 15 Lakh 25% 30%
Above ₹ 15 Lakh 30% 30%
Rebate under section 87(A) 100% tax rebate subject to maximum of ₹ 2,500 available to resident individual whose total income does not exceed ₹ 3.50 Lakh 100% tax rebate subject to maximum of ₹ 2,500 available to resident individual whose total income does not exceed ₹ 3.50 Lakh

Cess at 4% of tax applicable in all cases. Surcharge at 10% for income above ₹ 50 Lakh and at 15% for income above ₹ 1 Cr

The rebate of ₹ 12,500 is applicable for all income under the old income tax regime. Whereas, it is available only for the income upto ₹ 5 Lakh under the new income tax regime.

Senior Citizens Tax Slab (age more than 80 years FY 2019-20)

Income range per annum New Slab for FY 2020-21, AY 2021-22 Tax Rate FY 2019-20, AY 2020-21
Upto ₹ 2.50 Lakh per annum No Tax No Tax
Upto ₹ 5 Lakh per annum No Tax No Tax
Above ₹ 5 Lakh to ₹ 7.50 Lakh 10% 20%
Above ₹ 7.50 Lakh to ₹ 10 Lakh 15% 20%
Above ₹ 10 Lakh to ₹ 12.50 Lakh 20% 30%
Above ₹ 12.50 Lakh to ₹ 15 Lakh 25% 30%
Above ₹ 15 Lakh 30% 30%

Cess at 4% of tax applicable in all cases. Surcharge at 10% for income above ₹ 50 Lakh and at 15% for income above ₹ 1 Cr.

Income Tax Slabs for Other Entities

For other entities such as firms and domestic companies, Income Tax Slabs have been categorised based on their annual turnover as mentioned below.

New Income Tax Slab for Firms and Domestic Companies FY 2019-20

Tax Head Firms Domestic Companies
Income Tax for turnover upto ₹ 400 Cr 30% 25%
Income Tax for turnover above ₹ 400 Cr 30% 30%
Surcharge as % of income tax 12% of tax in case the total income exceeds ₹ 1 Cr
  • 7% of tax in case income is more than ₹ 1 Cr but less than ₹ 10 Cr.
  • 10% of tax in case income is more than ₹ 10 Cr.
Cess as % of tax and surcharge 3% of tax plus surcharge 3% of tax plus surcharge

The above table highlights the latest tax slabs for the firms and domestic companies. The tax treatment in both the cases differs from the tax treatment of individuals and HUFs.

Important Things to Remember while opting New Tax Regime

Under the Union Budget 2020, the individuals are offered a choice between the old and new tax regime to calculate their income tax liability. If an individual opts to go with the old regime, they can avail of the applicable exemptions and deductions, whereas in case of the new tax regime 70 of the commonly used deductions and exemptions are not available.

Should you opt for a new tax regime or go with the old regime?

The optional tax regime offered under the new budget is a mixed bag of both good and bad. While it is beneficial for individuals whose income falls under the slab up to Rs. 15 lakhs, it may not go in your favour if your income falls above the bracket of Rs. 15 lakhs. The reason for the same is that if you opt for a new tax regime, you have to forgo 70 exemptions, including house rent allowance, medical insurance premium, and travel allowance.

A comparison of old and new Income Tax Slab Rates

New vs Old Income Tax Regime

Scenario -I: In case you are salaried and claiming deductions under Section 80C, 80D, standard deduction and HRA exemption
The deductions and exemptions claimed would be ₹ 50,000 as the standard deduction, ₹ 1.50 Lakh under section 80C, ₹ 25,000 under Section 80D, and HRA exemption which will vary at each income level.
At a gross salary of ₹ 7.50 Lakh, the HRA exemption would be ₹ 1.50 Lakh, at gross salary ₹ 10 Lakh, the HRA exemption would be ₹ 2 Lakh, at gross salary ₹ 12.50 Lakh, the HRA exemption would be ₹ 2.50 Lakh, at gross salary ₹ 15 Lakh, the HRA exemption would be ₹ 3 Lakh, and at gross salary ₹ 20 Lakh, the HRA exemption would be ₹ 4 Lakh.
The tax benefit for each slab would be:

Gross Salary Tax Payable in Current IT Slab Tax Payable in New IT Slab Tax Saving (Payable)
At ₹ 7.50 Lakh - 39,000 (39,000)
At ₹ 10 Lakh 28,600 78,000 (49,400)
At ₹ 12.50 Lakh 70,200 1,30,000 (59,800)
At ₹ 15 Lakh 1,11,800 1,95,000 (83,200)
At ₹ 20 Lakh 2,34,000 3,51,000 (1,17,000)

Scenario -II: In case you are claiming the most common deductions i.e., deduction under Section 80C, 80D, and standard deduction
The standard deduction of ₹ 50,000, deduction under Section 80C of ₹ 1,50,000, and deduction under Section 80D of ₹ 25,000 will together amount to ₹ 2.25 Lakh as total deduction claimed.
The tax benefit under each slab would be:

Gross Salary Tax Payable in Current IT Slab Tax Payable in New IT Slab Tax Saving (Payable)
At ₹ 7.50 Lakh 18,200 39,000 (20,800)
At ₹ 10 Lakh 70,200 78,000 (7,800)
At ₹ 12.50 Lakh 1,24,800 1,30,000 (5,200)
At ₹ 15 Lakh 2,02,800 1,95,000 7,800
At ₹ 20 Lakh 3,58,800 3,51,000 7,800

Scenario -III: In case you are claiming only the standard deductions
The tax benefit under each slab when you claim only the standard deduction would be:

Gross Salary Tax Payable in Current IT Slab Tax Payable in New IT Slab Tax Saving (Payable)
At ₹ 7.50 Lakh 54,600 39,000 15,600
At ₹ 10 Lakh 1,06,600 78,000 28,600
At ₹ 12.50 Lakh 1,79,400 1,30,000 49,400
At ₹ 15 Lakh 2,57,400 1,95,000 62,400
At ₹ 20 Lakh 4,13,400 3,51,000 62,400

Budget 2020 Tax Highlights

Main tax highlights from the budget presented by Hon’ble Finance Minister Ms. Nirmala Sitharaman on 1st Feb 2020

  • Option to the taxpayer choose between old income tax rate and slabs and the new ones
  • New tax slabs offer reduction in applicable tax rate from 20% to 10% and from 30% to 20% in some cases (details in table below)
  • In case the tax payer opts for new slabs and rates, no exemption or deduction can be claimed such as those on account of house rent allowance (HRA) investments, LIC premium, school fees, mediclaim etc.

FAQs

What is the income tax rate for 2019-20?

The latest income tax slab for 2019-20 is as follows:

Income SlabTax for individual below 60 years of age
Upto ₹ 2,50,000 NIL
₹ 2,50,001 to ₹ 5,00,000 5%
₹ 5,00,001 to ₹ 1,00,00,000 20%
Above ₹ 10,00,000 30%

What are tax exemptions for 2019?

The Income Tax Act, 1961 list out various expenses and investments which are exempted for the purpose of calculating income tax. There’s a detailed table listing out the income tax exemptions that you can avail of in 2019.

What is the standard deduction for FY 2019-20?

Standard deduction of ₹ 50,000 is available for salaried individuals for FY 2019-20.

How is the tax calculated on salary?

Income tax on salary is calculated after taking into account various exemptions such as HRA exemption, LTA exemption, interest on the home loan. After arriving at gross salary, income from other sources is added to get total income from which other applicable deductions are deducted to arrive at total taxable income. It is then on the total taxable income that income tax is calculated based on the applicable slab rate and cess.

What is upto ₹ 5 Lakh tax?

For the income upto ₹ 5 Lakh, there is effectively no income tax due to a tax rebate available to individuals up to ₹ 12,500.

Is the new tax slab beneficial?

The new tax slab is beneficial to those assesses whose income tax calculation does not include too off many commonly used deductions.

What are the income tax slabs proposed in the new income tax regime?

In the new Income tax regime, the slabs are:

  • Upto ₹ 2.50 Lakh – NIL
  • From ₹ 2.50 Lakh to ₹ 5 Lakh – 5%
  • From ₹ 5 Lakh to ₹ 7.50 Lakh – 10%
  • From ₹ 7.50 Lakh to ₹ 10 Lakh – 15%
  • From ₹ 10 Lakh to ₹ 12.50 Lakh – 20%
  • From ₹ 12.50 Lakh to ₹ 15 Lakh – 25%
  • Above ₹ 15 Lakh – 30%

Do I have to forgo all the tax exemptions and deductions as per the new income tax regime?

As per the new income tax regime proposed in the budget, you will have to forgo all the common income tax deductions and exemptions available such as deductions under section 80C, 80D, except for employer’s contribution to NPS (80CCD (2)).

What is the senior citizen income tax Slab for 2019-20?

The income tax slab rates applicable to senior citizens for 2019-20 are:

Income Slab Tax Rate FY 2019-20, AY 2020-21
Upto ₹ 3,00,000 No Tax
₹ 3,00,001 to ₹ 5,00,000 5%
₹ 5,00,001 to ₹ 10,00,000 20%
Above ₹ 10 Lakh 30%
Rebate under section 87(A) 100% tax rebate subject to maximum of ₹ 2,500 available to resident individual whose total income does not exceed ₹ 3.50 Lakh

Is there a choice between a new and old income tax regime?

Yes, you can choose between the new and old income tax regime in each financial year provided you don’t have business income.

Is the tax rebate of ₹ 12,500 under section 87A available in new regime?

Yes, the taxpayer can still claim the tax rebate of ₹ 12,500 if the annual income does not exceed ₹ 5 Lakh in a financial year.

Are cess and surcharge still payable under the new income tax regime?

Yes, 4% of cess and surcharge as pe your income is also applicable in the new income tax regime.

What is the income limit for income tax slab 2019-20?

The income limit as per tax slab 2019-20 to which no income tax is levied is ₹ 2.50 Lakh for individual below 60 years and ₹ 3 Lakh for senior citizens.


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