Income-tax Slab Rates FY 2019-20 (AY 2020-21)

Before knowing the tax rates, it is very important to understand the terms Financial year (FY) and Assessment Year (AY).

The below-mentioned tax rates/ slab is on the income earned for the period 1 April 2019 to 31 March 2020. FY stands for the ‘financial year’ which is from 1 April 2019 to 31 March 2020. AY stands for Assessment year which 2020-21.

For individuals, the due date to file the income tax return for the income earned from 1 April 2019 to 31 March 2020 is July 2020.

The income tax rates for this period has been updated in the budget released on 1 February 2019.

What is gross total income and taxable income (net income)?

Before jumping into the Latest Income Tax Slab Rates FY 2019-20 (AY 2020-21), it is important to understand the difference between Gross Income and Total Income.

Many of us have the confusion of understanding what is Gross Income and what is Total Income or Taxable Income. Also, we calculate the income tax on Gross Income. This is completely wrong. The income tax will be chargeable on Total taxable Income. Hence, it is very much important to understand the difference.

Gross Total Income means total income under the heads of Salaries, Income from house property, Profits and gains of business or profession, Capital Gains or income from other sources before making any deductions under Sections.80C to 80U

Total Income or Taxable Income means Gross Total Income reduced by the deductions under Sec.80C to 80U. Refer our Article How to save tax to know various deductions available under the Income-tax Act.

Therefore your Total Income or Taxable Income will always be less than the Gross Total Income.

Read our Article on Amendments as per the Interim Budget 2019 and no tax up to Rs. 5,00,000 to get the complete idea of the budget and how it impacts you.

Final tax is computed and levied on total taxable income.

  • The tax rates would depend upon the following factors:
  • Type of persons i.e. individual, company, partnership
  • Nature of income
  • Quantum of income
  • Residential status
  • Age (in case of individuals)
  1. Income-Tax Slab for Individuals less than 60 years for F.Y. 2017-18 ( For Male or Female)
Income SlabsIncome-tax rates FY 2019-20
Up to 2,50,000Nil
From 2,50,000 to 5,00,0005%
From 5,00,000 to 10,00,00020%
Above 10,00,00030%
Ø Surcharge: 10% of tax where total income increases Rs. 50 lakhs

15% of tax where total income increases Rs. 1 crore

Ø  Health & Education cess: 3% of tax plus surcharge
Ø  Rebate – A resident individual is entitled to rebate (refund) u/s 87A if his total income does not exceed Rs. 5,00,000. The amount of rebate shall be 100% of income-tax or Rs. 12,500, whichever is less.

Income-Tax slab for Individuals who are of the age 60 years or more but less than 80 years of age (For Male or Female)

Income SlabsIncome-tax rates FY 2019-20
Up to 3,00,000Nil
From 3,00,000 to 5,00,0005%
From 5,00,000 to 10,00,00020%
Above 10,00,00030%
Ø Surcharge: 10% of tax where total income increases Rs. 50 lakhs

15% of tax where total income increases Rs. 1 crore

Ø  Health & Education cess: 3% of tax plus surcharge
Ø  Rebate – A resident individual is entitled to rebate (refund) u/s 87A if his total income does not exceed Rs. 5,00,000. The amount of rebate shall be 100% of income-tax or Rs. 12,500, whichever is less.

Income-Tax slab for Individuals who is of the age 80 years or more (For Male or Female)

Income SlabsIncome-tax rates FY 2019-20
Up to 3,00,000Nil
From 3,00,000 to 5,00,000Nil
From 5,00,000 to 10,00,00020%
Above 10,00,00030%
Ø Surcharge: 10% of tax where total income increases Rs. 50 lakhs

15% of tax where total income increases Rs. 1 crore

Ø  Health & Education cess: 3% of tax plus surcharge
Ø  Rebate – A resident individual is entitled to rebate (refund) u/s 87A if his total income does not exceed Rs. 5,00,000. The amount of rebate shall be 100% of income-tax or Rs. 12,500, whichever is less.

Income tax rates for a non-resident – INDIVIDUALS

Income SlabsIncome-tax rates FY 2017-18
Upto 2,50,000Nil
From 2,50,000 to 5,00,0005%
From 5,00,000 to 10,00,00020%
Above 10,00,00030%
Ø  Surcharge : 10% of tax where total income increases Rs. 50 lakhs

15% of tax where total income increases Rs. 1 crore

Ø  Health & Education cess: 3% of tax plus surcharge

Age wise slabs and rebate as mentioned above for residents is not available to non-residents.

We have computed below the tax amount of an individual who is less than 60 years. The amounts are total taxable income after considering the deductions. The working shall give you a fair idea on how the tax is computed.

Tax Rates and SlabsTotal Income of 15,00,000Total Income of 7,00,000Total Income of 5,00,000
Up to Rs. 2,50,000NilNilNil
2,50,000 to 5,00,000 (5%)12,50012,50012,500
5,00,000 to 10,00,000 (20%)1,00,00040,000Nil
Above 10,00,000 (30%)1,50,000NilNil
Rebate u/s 87ANilNil12,500
Total Tax Payable2,62,50052,500Nil

 

Leave a comment



debora M

3 months ago

Very informative article with tons of knowledge.

CONTACT US



Wealth Cafe Financial Advisors Pvt Ltd is a AMFI registered ARN holder with ARN -78274.

Wealth Cafe Financial Advisors Pvt Ltd is a SEBI registered Authorised Person (sub broker) of Motilal Oswal Financial Services Ltd with NSE Regn AP0297087003 and BSE Regn AP0104460164562.

 

Copyright 2010-20 Wealth Café ©  All Rights Reserved