What is an income tax slab?
Under the Income Tax Act, 1961, the percentage of income that is payable as tax to the Government is based on the amount of income that a person has earned during a year. For the financial year 2019-20, which means the year from April 1, 2019 – March 31, 2020 – the Income-tax slabs have been fixed as below.
Income Tax Slabs for Individuals for F.Y. 2019-20
1. Individuals who are below the age of 60 years
| Net Income (in rupees) | Tax Rate for F.Y. 2019-20 or A.Y. 2020-21 |
|---|---|
| up to Rs. 2,50,000 | Nil |
| Rs. 2,50,000 to Rs. 5,00,000 | 5% |
| Rs. 5,00,000 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
2.Individuals who are between the age of 60 years to 80 years old
| Net Income (in rupees) | Tax Rate for F.Y. 2019-20 or A.Y. 2020-21 |
|---|---|
| Up to Rs. 3,00,000 | Nil |
| Rs. 3,00,001 to Rs. 5,00,000 | 5% |
| Rs. 5,00,001 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
3.Individuals who are above the age of 80 years
| Net Income (in rupees) | Tax Rate for F.Y. 2019-20 or A.Y. 2020-21 |
|---|---|
| Up to Rs. 5,00,000 | Nil |
| Rs. 5,00,001 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
Important Points to Remember:-
- The income tax rates are applied to the annual income calculated. Thereafter Surcharge and Cess is added to the tax payable.
- A surcharge is also applicable slab wise. The surcharge is calculated on the Tax amount. If the income is:
| Net Income (in rupees) | Surcharge Rate for F.Y. 2019-20 or A.Y. 2020-21 |
|---|---|
| Rs. 50 Lakh to Rs. 1 Crore | 10% |
| Rs. 1 Crore to Rs. 2 Crore | 15% |
| Rs. 2 Crore to Rs. 5 Crore | 25% |
| Above Rs. 5 Crore | 37% |
Note:- An additional Cess of 4% for Health & Education is applicable to the income tax plus surcharge.
Income Tax Rate for Partnership Firm for F.Y. 2019-20
- A partnership firm (including LLP) is taxable at 30%
- The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees.
- The amount of income-tax and the applicable surcharge shall be further increased by health and education cess calculated at the rate of 4% of such income-tax and surcharge.
Income Tax Rate for Domestic Companies for F.Y. 2019-20
Domestic Companies have received a boost from Govt. With the turnover raised from 250 crores to 400 crores for a tax rate of 25%. The turnover wise tax calculation is:
| Domestic Company | Tax Rate for F.Y. 2019-20 or A.Y. 2020-21 |
|---|---|
| Total turnover or Gross Receipts up to 400 Crore in the previous year 2017-18 | 25% |
| Any other domestic Company | 30% |
Surcharge on tax:
- 7% in cases where the annual income is between Rs.1 Crore to Rs.10 Crore
- 12% in cases where the annual income is more than Rs.10 Crore
Health & Education Cess:- is at the rate of 4% -calculated on tax amount plus surcharge
