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 Slab||Tax Rate|
|Up to Rs.2.5 lakh||Nil|
|From Rs.2,50,001 to Rs.5,00,000||5% of the total income that is more than Rs.2.5 lakh + 4% cess|
|From Rs.5,00,001 to Rs.7,50,000||10% of the total income that is more than Rs.5 lakh + 4% cess|
|From Rs.7,50,001 to Rs.10,00,000||15% of the total income that is more than Rs.7.5 lakh + 4% cess|
|From Rs.10,00,001 to Rs.12,50,000||20% of the total income that is more than Rs.10 lakh + 4% cess|
|From Rs.12,50,001 to Rs.15,00,000||25% of the total income that is more than Rs.12.5 lakh + 4% cess|
|Income above Rs.15,00,001||30% of the total income that is more than Rs.15 lakh + 4% cess|
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.
- Individuals and Hindu Undivided Family (HUF) less than 60 years old
- Senior Citizens who are 60 years old or more, but less than 80 years old
- Senior Citizens who are 80 years old or more
- 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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