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What is Professional Tax?

State governments levy professional tax on people who earn a living through their profession. The tax rate differs from state to state. While states like Maharashtra levy a professional tax of Rs 2,500 annually from people earning Rs 1.2 lakh per year and above, other states like Haryana do not have any such taxation policy.

No state is allowed to levy a professional tax of more than Rs 2,500 per annum. Senior citizens, disabled persons, members of the forces, and parents or guardians of mentally or permanently disabled children are also exempted from paying professional tax.

Origin of Professional Tax in India

Professional Tax was introduced in 1949 and state governments were given the authority to collect it. At the time of its introduction, the maximum annual limit of this tax was capped at Rs 250. However, by 1988, this limit had increased to Rs 2,500 per individual. Three decades on, the limit hasn’t changed.

Profession tax rates across states: Why do they vary?

States are free to levy a rate they deem fit for the citizens in their jurisdiction. Like income tax, there are slabs even in professional tax, and these differ between states. The one thing common across states is the maximum limit of Rs. 2500.

Profession tax is usually collected in 11 equal deductions (for example, of Rs 200 each) and one larger deduction (of say Rs 300 in February) for the year.

Some states and union territories do not levy a professional tax at all.

Also state governments have different rules for different sets of people. For example, a factory owner in one state may be liable to pay professional tax only if his annual turnover crosses a certain mark, which may not be the case in another state. In some states, the owner of a transport business may have to pay professional tax based on the vehicles he owns; in others the tax may be based on his income.

Who Collects Professional Tax in India?

Business owners or individuals who employ others are liable to deduct professional tax from their employees’ salaries and pay it to the respective state government. Failure to deduct professional tax or pay it to the government attracts penalties. If you are self-employed, you are responsible for paying profession tax for yourself.

As a self-employed person, you can register with your local state government to pay profession tax by filling up a form. The government will issue you a registration number. You can use this number to pay profession tax through your bank if it is authorised to collect it.

How to register for and pay profession tax?

You must get an RC or registration certificate to pay professional tax within 30 days of hiring employees in your company. If your business operates across states, then you must register in all the states where you are liable to pay professional tax. Registration is a one-time process and many states offer the facility of online registration and payment.

In every state the commercial tax department is responsible for collecting profession tax from employers. If you are an employer, you can pay the tax through a challan at the nearest bank that collects it.

If your company has a staff-strength greater than 20, then you must make payment of profession tax within 15 days after a month ends. If you employ fewer than 20 people, then you must deposit the tax every quarter, by the 15th of the last month of the quarter.

If you do not get a registration certificate within 30 days, you will have to pay a penalty of Rs 5 per day till you get the RC. If you do not deposit the profession tax in time, you will be liable to pay 10% of the tax amount as penalty.

Besides paying the tax, you must also file professional tax returns. If you fail to do so in time, you will have to cough up a penalty of Rs 1,000 for one month of delay. Post one month of delay, the penalty increases to Rs 2,000.

Professional Tax Slabs in the States

Different states levy different rates of professional taxes depending on income slabs. Here are a few of them:

Maharashtra

Income Tax Slabs and Rates in India for FY 2019-2020

Does the thought of income tax play on your mind at the end of every fiscal year? Knowing the income tax slabs can certainly help you get rid of the worries. It will give you a clear idea of how much money would be deducted from your salary and where you can save. In this way, you can determine the take-home salary and choose how to enjoy tax benefits.  

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%/p>

 

• 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%/p>

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

Monthly Salary

Professional Tax deduction per month

Up to Rs. 7,500 (for men)

Nil

Up to Rs. 10,000 (for women)

Nil

Rs. 7,501 – Rs. 10,000

Rs. 175

Rs. 10,001 & above

Rs. 200 (and Rs. 300 in February)

Karnataka

Income Tax Slabs and Rates in India for FY 2019-2020

Does the thought of income tax play on your mind at the end of every fiscal year? Knowing the income tax slabs can certainly help you get rid of the worries. It will give you a clear idea of how much money would be deducted from your salary and where you can save. In this way, you can determine the take-home salary and choose how to enjoy tax benefits.  

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%/p>

 

• 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%/p>

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

Monthly Salary

Professional Tax deduction per month

Up to Rs. 15,000

Nil

Rs. 15,001 & above

Rs. 200

West Bengal

Income Tax Slabs and Rates in India for FY 2019-2020

Does the thought of income tax play on your mind at the end of every fiscal year? Knowing the income tax slabs can certainly help you get rid of the worries. It will give you a clear idea of how much money would be deducted from your salary and where you can save. In this way, you can determine the take-home salary and choose how to enjoy tax benefits.  

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%/p>

 

• 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%/p>

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

Monthly Salary

Professional Tax deduction per month

Up to Rs. 8,500

Nil

Rs. 8,501 – Rs. 10,000

Rs. 90

Rs. 10,001 – Rs. 15,000

Rs. 110

Rs 15,001 – Rs. 25,000

Rs. 130

Rs. 25,001 – Rs. 40,000

Rs. 150

Rs. 40,001 & above

Rs. 200

Madhya Pradesh

Income Tax Slabs and Rates in India for FY 2019-2020

Does the thought of income tax play on your mind at the end of every fiscal year? Knowing the income tax slabs can certainly help you get rid of the worries. It will give you a clear idea of how much money would be deducted from your salary and where you can save. In this way, you can determine the take-home salary and choose how to enjoy tax benefits.  

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%/p>

 

• 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%/p>

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

Monthly Salary

Professional Tax deduction per month

Up to Rs. 12,499

Nil

Rs. 12,500 – Rs. 14,999

Rs. 125

Rs. 15,000 & above

Rs. 208 (and Rs. 212 in March)

Tamil Nadu

Income Tax Slabs and Rates in India for FY 2019-2020

Does the thought of income tax play on your mind at the end of every fiscal year? Knowing the income tax slabs can certainly help you get rid of the worries. It will give you a clear idea of how much money would be deducted from your salary and where you can save. In this way, you can determine the take-home salary and choose how to enjoy tax benefits.  

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%/p>

 

• 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%/p>

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

Monthly Salary

Professional Tax deduction per month

Up to Rs. 3,500

Nil

Rs. 3,501 – Rs. 5,000

Rs. 16.66

Rs. 5,001 – Rs. 9,000

Rs. 40

Rs. 9,001 – Rs. 12,500

Rs. 126.67

Rs. 12,501 & above

Rs. 182.50

Andhra Pradesh

Income Tax Slabs and Rates in India for FY 2019-2020

Does the thought of income tax play on your mind at the end of every fiscal year? Knowing the income tax slabs can certainly help you get rid of the worries. It will give you a clear idea of how much money would be deducted from your salary and where you can save. In this way, you can determine the take-home salary and choose how to enjoy tax benefits.  

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%/p>

 

• 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%/p>

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

Monthly Salary

Professional Tax deduction per month

Up to Rs. 15,000

Nil

Rs 15,001 – Rs 20,000

Rs 150

Rs 20,001 & above

Rs 200

Gujarat

Income Tax Slabs and Rates in India for FY 2019-2020

Does the thought of income tax play on your mind at the end of every fiscal year? Knowing the income tax slabs can certainly help you get rid of the worries. It will give you a clear idea of how much money would be deducted from your salary and where you can save. In this way, you can determine the take-home salary and choose how to enjoy tax benefits.  

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%/p>

 

• 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%/p>

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

Monthly Salary

Professional Tax deduction per month

Up to Rs 5,999

Nil

Rs 6,000 – Rs 8,999

Rs 80

Rs 9,000 – Rs 11,999

Rs 150

Rs 12,000 & above

Rs 200

Odisha

Income Tax Slabs and Rates in India for FY 2019-2020

Does the thought of income tax play on your mind at the end of every fiscal year? Knowing the income tax slabs can certainly help you get rid of the worries. It will give you a clear idea of how much money would be deducted from your salary and where you can save. In this way, you can determine the take-home salary and choose how to enjoy tax benefits.  

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%/p>

 

• 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%/p>

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

Monthly Salary

Professional Tax deduction per month

Up to Rs 5,000

Nil

Rs 5,001 – Rs 6,000

Rs 30

Rs 6,001 – Rs 8,000

Rs 50

Rs 8,001 – Rs 10,000

Rs 75

Rs 10,001 – Rs 15,000

Rs 100

Rs 15,001 – Rs 20,000

Rs 150

Rs 20,001 & above

Rs 200

PROFESSIONAL TAX DEADLINE EXTENSIONS IN 2020

The COVID-19 pandemic and the consequent lockdowns have led to technical difficulties in paying professional tax. Considering this, several state governments have introduced relief measures in this respect. Here are some examples:

  • The Maharashtra government waived fees on the late filing of professional tax returns. The waiver is applicable to monthly or annual returns up to March 2020 and the return for April 2020. However, the registered employer must fulfil the eligibility criteria to get this exemption.
  • In Karnataka too, the state government offered certain extensions. The deadline for submitting the returns for March 2020 was pushed to 20 May 2020 (the earlier deadline was 20 April 2020). The due date for annual enrolment and tax payment was postponed as well—from 30 April 2020 earlier to 30 May 2020.
  • The West Bengal government extended the date for filing professional tax returns by three months. The earlier deadline of 30 June 2020 was moved to 30 September 2020.
  • Private sector employers in Madhya Pradesh got a breather as well. The due date for paying tax was moved from 10 April 2020 to 30 April 2020. Further, an extension was provided for filing returns—with the 15 April 2020 due date being shifted to 5 May 2020.

Besides the states mentioned above, other states that levy profession tax include: Chhattisgarh, Assam, Kerala, Meghalaya, Jharkhand, Tripura, Bihar, Manipur, Mizoram, Pondicherry, Rajasthan, Telangana, Himachal Pradesh, Sikkim, Nagaland, and Jammu & Kashmir.

States like Delhi, Uttar Pradesh, Haryana, Andaman and Nicobar, Goa and Uttaranchal are some of those who don’t levy profession tax.