Income Tax Slabs And Rates In India For FY 2019-2020
- 5m0•
- 01 Feb 2023
Here is an overview of the existing tax slabs so that you can make your plans in advance.
Income Tax Slabs In India
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:
Income Tax Slabs For Individuals And HUF Below The Age Of 60
| 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 |
Income Tax Slabs For Senior Citizens (60 Years And Above But Less Than 80 Years)
| 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 |
Income Tax Slabs For Senior Citizens (80 Years And Above)
| 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.
Income Tax Slabs Under New Regime
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% |
Surcharge On Income Tax
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
Income Tax Slabs For Domestic Companies
| 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% |
What Are Your Tax-saving Investments?
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
