Income tax is one of the most important taxes that are imposed by the government on an individual’s earnings. There are different tax slabs and brackets based on the income of every individual. Those who are earning a lesser amount of money have to pay tax at lower rates while those earning gigantic amounts have to pay at higher rates.
Every year, the government comes up with new tax slabs and rates keeping in mind various factors such as inflation, growth rate amongst others. So as an individual you need to be updated about any kind of change in the tax slabs before filing your Income-tax returns. In addition to this, the government also comes up with different types of rebates on savings, housing loan and contributions made to the charitable institutions. Here is a brief guide that will help you to know all about the income tax for the FY 2019-20.
Tax slabs for residents below the age of 60 years and HUFs
|Up to 2.5 lacs||No tax|
|2.5 lacs to 5 lacs||5% tax on the income exceeding the bracket of 2.5 lacs+ 4% of cess on the tax paid|
|5 lacs to 10 lacs||12500+ 20% of tax on income exceeding 5 lacs + 4% of cess on the total tax paid|
|10 lacs & above||112500 + 30% of income tax on income exceeding 1000000 & 4% of cess on the tax paid|
Tax slabs for senior citizen (60 to 80 years)
|Up to 3 lacs||No tax|
|3 lacs to 5 lacs||5% tax on the income exceeding the bracket of 3 lacs+ 4% of cess on the tax paid|
|5 lacs to 10 lacs||10000+ 20% of tax on income exceeding 5 lacs + 4% of cess on the total tax paid|
|10 lacs & above||110000 + 30% of income tax on income exceeding 1000000 & 4% of cess on the tax paid|
Tax slab for Indian residents exceeding 80 years of age (super senior citizens)
|Up to 5 lacs||No tax|
|5 lacs to 10 lacs||20% of tax on income exceeding 5 lacs + 4% of cess on the total tax paid|
|10 lacs & above||100000 + 30% of income tax on income exceeding 1000000 & 4% of cess on the tax paid|
Additional important things to remember
An additional surcharge of 10% is levied when the income is over 50 lacs but less than one crore. When the income crosses the bracket of 1 crore, a surcharge of 15% is levied.
Tax slabs for corporate
|Annual turnover of up to 250 crores in the previous year||25% of income + 4% of cess|
|Annual turnover of more than 250 crores in the previous year||30% of income+ 4% of cess|
Some additional points that you need to keep in mind are an additional surcharge of 7% is applicable for income within the range of 1-10 crore while 12% will be payable when it exceeds the threshold of 10 crores.
New rebates, deductions and investment rules as per budget 2019-20
There are several options by which individuals can get to save their tax and here is a look at them:
Change in the income tax slab
In the new budget, the tax slabs for individual income has been changed to 5 lacs. So, if an individual is having a net income of 5 lacs per annum, he is not liable to pay any tax. All the other tax slabs are the same and no changes have been made in them.
Increase in the standard deduction
The standard deductions have been increased from 40000 to 50000. So, now you can save an additional amount of money on the income that you are generating.
No tax on rental income
This is another gift from the government to those who are making the money by the form of house rent. Now you don’t have to pay any tax on rent received from your second home.
Rise in the TDS limit
In the last budget, the TDS limit for the senior citizens was increased from 10000 to 50000. In the current one, the government has gifted other residents by enhancing the limit to 40000 from existing 10000. So, if your earning from deposits is up to 40000, you are not liable to pay any kind of tax on the same.
Capital gain tax on long term investment
From the current fiscal, you can make use of the capital gain to buy two houses provided that the amount does not get to exceed more than 2 crores.
There are various income tax calculators that are now available online. You shall be smart enough and make use of these calculators to arrive at your taxable income and income tax. But make sure that you are mentioning each and every detail before filing the ITR.