Income Tax Slabs And Rates In India For FY 2019-2020

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  • 01 Feb 2023

Here is an overview of the existing tax slabs so that you can make your plans in advance.

Taxpayers in India are classified into different groups based on their respective incomes. Each group has to pay income tax based on the slab they come under. There is a designated rate of tax deduction, which is usually revised every year. Before we proceed to the rates prescribed by the government, it is important to have a clear idea of the categories of tax-payers:

  • Individuals and Hindu Individual Family (HUF) (<60 years)
  • Senior citizens (>= 60 years, but <80 years)
  • Senior citizens (>= 80 years)
  • Domestic companies

Read more: Right time to start tax planning

Following these categories, the income tax slabs in India for the year 2019–20 are given below:

Annual Income Rate of Tax Charged Health and Education Cess
Up to Rs. 2.5 lakh
Nil
Nil
Rs 250,001–Rs 5 lakh
5%
4% of the income tax and surcharge
Rs. 500,001–Rs 10 lakh
20%
4% of the income tax and surcharge
More than Rs 10 lakh
30%
4% of the income tax and surcharge
Annual Income Rate of Tax Charged Health and Education Cess
Up to Rs 3 lakh
Nil
Nil
Rs 300,001–Rs 5 lakh
5%
4% of the income tax and surcharge
Rs. 500,001–Rs 10 lakh
20%
4% of the income tax and surcharge
More than Rs 10 lakh
30%
4% of the income tax and surcharge
Annual Income Rate of Tax Charged Health and Education Cess
Up to Rs 5 lakh
Nil
Nil
Rs 500,001–Rs 10 lakh
20%
4% of the income tax and surcharge
More than Rs 10 lakh
30%
4% of the income tax and surcharge

These rates are valid for FY 2019–20 and FY 2020-21.

When paying income tax for FY 2020–21, taxpayers can also opt for a new taxation regime with lower tax rates. However, under the new regime, the taxpayer cannot claim any tax exemptions and deductions. Take a look at the special tax rates here:

Annual Income (Rs) Rate of Tax Charged
Up to Rs 2,50,000
Nil
Rs 2,50,001–Rs 5,00,000
5%
Rs 5,00,001–Rs 7,50,000
10%
Rs 7,50,001–Rs 10,00,000
15%
Rs 10,00,001–Rs 12,50,000
20%
Rs 12,50,001–Rs 15,00,000
25%
Above Rs 15,00,000
30%

If your annual income is above Rs 50 lakh, a additional surcharge is levied on your income. The rate of surcharge varies based on the income range, but the slabs are the same for all age groups. The current surcharge rates are given below:

Annual Income Rate of Surcharge Extent of Relief
Rs 50 lakh–Rs 1 crore
10%
Payable income tax and surcharge will not exceed the income tax on Rs 50 lakh by more than the amount of income exceeding Rs 50 lakh.
Rs 1 crore–Rs 2 crore
15%
Payable income tax and surcharge will not exceed the income tax on Rs 1 crore by more than the amount of income exceeding Rs 1 crore.
Rs 2 crore–Rs 5 crore
25%
Payable income tax and surcharge will not exceed the income tax on Rs 2 crore by more than the amount of income exceeding Rs 2 crore.
Rs 5 crore–Rs 10 crore Above Rs 10 crore
37%
Payable income tax and surcharge will not exceed the income tax on Rs 1 crore by more than the amount of income exceeding Rs 1 crore.

The government no longer differentiates between men and women as far as payment of tax is concerned. So, before you plan your investment in order to avail tax exemptions, it is important to know the income tax slab you fall under.

Read more: Tax-saving investment options

NA

25%

30%

Company Turnover Rate of Tax Charged in AY 2020–21 Rate of Tax Charged in AY 2021–22
Company where total turnover during previous year (FY 2017–18) was less than Rs 400 crore
25%
NA
Company where total turnover during previous year (FY 2018–19) was less than Rs 400 crore
NA
25%
Any other domestic company
30%
30%

Rate of Surcharge

  • Taxable income more than Rs 1 crore but less than Rs 10 crore: Surcharge of 7% will apply on the income tax payable. However, the total of income tax and surcharge will not exceed the income tax on Rs 1 crore by more than the amount of income exceeding Rs 1 crore.
  • Taxable income more than Rs 10 crore: Surcharge of 12% will apply on the income tax payable. But the sum of income tax and surcharge will not exceed the income tax on Rs 10 crore by more than the amount of income exceeding Rs 10 crore.

4% Health and education cess:

This will be levied on the total of income tax and surcharge.

Domestic companies can also opt for special tax rates under the new regime in AY 2020–21:

Section Chosen for Income Tax Purposes Rate of Tax Charged in AY 2020–21 Rate of Tax Charged in AY 2021–22
Section 115BA
25%
25%
Section 115BAA
22%
22%
Section 115BAB
15%
15%

Who would not want to save as much as possible from their taxes? The Government of India offers provisions to do the same. Section 80C lists a number of tax-saving investments:

  • Public Provident Fund (PPF)
  • National Pension Scheme (NPS)
  • Equity-Linked Savings Schemes (ELSS)
  • Fixed Deposits
  • Life Insurance
  • Health Insurance

These are just a few of the tools that allow you to avail tax exemption (refer to Section 80C).

Read more: Investments under Section 80C

Investing in equity-linked savings schemes (ELSS) is considered to be the most profitable. These funds enjoy the shortest lock-in period but generate better income than PFF or NPS. The interest that your FD earns is not tax-free, but your income from ELSS is exempted from tax. (More on the benefits of ELSS)

All you need to do is set aside a little time from your busy schedule. Use this time to assess the pros and cons of each of these instruments. Then choose the ones that best suit your requirements.

Summing Up

A thorough understanding of the income tax slabs prescribed by the Indian government would help you plan your investment and savings. This is how you balance your income and expenditure.

Read more: Reasons to file ITR

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