New Income Tax Slabs for Financial Year (FY 2020-2021)

New Income Tax Slabs for Financial Year (FY 2020-2021): The 2020 Interim Budget was offered on 1 Feb 2020 by the Honourable Finance Minister Nirmala Sitharaman. The biggest announcement in this budget is the rebate of Rs.12,500 which has been announced for taxpayers who have a taxable income of up to Rs.5 lakh.

Income tax slabs and rates for the FY 2019-20 and AY 2020-2021

There are 3 different classes of individual taxpayers and 1 for domestic companies.

1. Individuals and Hindu Undivided Family (HUF) less than 60 years old
2. Senior Citizens who are 60 years old or more, but less than 80 years old
3. Senior Citizens who are 80 years old or more
4. Domestic Companies
   

   Income Tax Slab for Individuals less than 60 years of age (For Male & Female both)
   Net Income Slab (Gross Taxable Income – deductions)	Income Tax Rate	Surcharge	Health & Education Cess	Rebate u/s 87A  (FY 2019-20)
   Upto 2,50,000	Nil	Nil	Nil	Nil
   From 2,50,001- 5,00,000	0.05	Nil	4%	For income upto Rs 5 lakhs Tax Rebate upto  Rs 12,500
   From 5,00,001-10,00,000	12,500 + 20%	Nil	4%	Nil
   From 10,00,001-50,00,000	1,12,500/- + 30%	Nil	4%	Nil
   From 50,00,001-1,00,00,000	13,12,500 + 30%	10%	4%	Nil
   Above 1,00,00,000 but upto 2,00,00,000	28,12,500 + 30%	15%	4%	Nil
   Above 2,00,00,000 but upto 5,00,00,000	58,12,500 + 30%	25%	4%	Nil
   Above 5,00,00,000	1,48,12,500 + 30%	37%	4%	Nil

   What are the changes in new Income tax slab rates for F.Y. 2019-20(A.Y. 2020-21)?

   1- Yes you have heard correct! No Income Tax would be levied on the income up to Rs. 5 Lakh as the limit of Rebate u/s 87A has been increased from Rs.3.5 Lakhs to Rs.5 Lakhs. Which means Tax liability is there but has been Exempted under section 87A which provides exemption on tax payment to a RESIDENT INDIVIDUAL.

   2- Standard deduction also increased from Rs 40 Thousand to Rs 50 Thousand for salaried class and pensioners.

   3- Those companies whose turnover does not exceed INR 400 crore is liable to 25% tax rate and above 400 crore turnover 30% tax.

   Q- What does Income Tax slabs mean ?

   Ans: Income tax is charged on the basis of the income of individuals  which is known as income tax slab.

    Q- Whether income tax slab applied after deduction or before deductions?

   Ans: Income Tax is levied on income after deduction.

   Q- Is income tax levied before reducing standard deduction from the income?

   Ans: No! It is calculated after Standard Deduction.

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