Income Tax Slabs 2020 & Tax Rates in India for FY 2020-21 – Budget 2020 Revised IT Slabs (AY 2021-22)

In India, income tax is levied on individual taxpayers on the basis of a slab system where different tax rates have been prescribed for different slabs and such tax rates keep increasing with an increase in the income slab.

Existing tax regime:

There are three categories of individual taxpayers:

• Individuals (below the age of 60 years), which includes residents as well as non-residents
• Resident senior citizens (60 years and above but below the age of 80 years)
• Resident super senior citizens (above 80 years of age)

There are different slabs for each category of taxpayers. The latest income tax slabs for AY 2019-20, AY 2020-21 and AY 2021-22 are discussed in this article. Such tax slabs tend to undergo a change during every budget.

New tax regime:

Budget 2020 has announced a new tax regime giving taxpayers an option to pay taxes as per the new tax slabs from FY 2020-21 onwards.

Income tax slabs under the new tax regime for all individuals for FY 2020-21 (AY 2021-22)

• The tax calculated on the basis of such rates will be subject to health and education cess of 4%.
• Any individual opting to be taxed under the new tax regime from FY 2020-21 onwards will have to give up certain exemptions and deductions.
• Here is the list of exemptions and deductions that a taxpayer will have to give up while choosing the new tax regime.

Leave Travel Allowance (LTA)

House Rent Allowance (HRA)

Conveyance

Daily expenses in the course of employment

Relocation allowance

Helper allowance

Children education allowance

Other special allowances [Section 10(14)]

Standard deduction

Professional tax

Interest on housing loan (Section 24)

Chapter VI-A deduction (80C,80D, 80E and so on) (Except Section 80CCD(2) and 80JJA)

• Points to remember while opting for the new tax regime:

-Option to be exercised on or before the due date of filing return of income for AY 2021-22

-In case a taxpayer has a business income and exercised the option, he/she can withdraw from the option only once. A business taxpayer withdrawing from the optional tax regime has to follow the regular income tax slabs.

According to the current income tax laws in India, the income tax rate on resident individuals varies based on their age. There are different tax slabs applicable to the individuals for the financial year 2018-19 and 2019-20. For instance, a resident individual, aged below 60 years, with an income less than Rs 2.5 lacs is exempt from paying income tax.

Given below are the tables for the latest income tax slabs for FY 2018-19 and FY 2019-20.

Income Tax Slabs & Rates for Individual Tax Payers & HUF (Less Than 60 Years Old) for FY 2019-20 – Part I

• No tax for individuals with income less than ₹ 2,50,000
• 0%-5% tax with income ₹ 2.5 lacs to 5 lacs for different age groups
• 20% tax with income ₹ 5 lacs to 10 lacs
• 30% tax with income above ₹ 10 lacs
• A tax rebate under section 87A is allowed to individual taxpayers a maximum amount of:

– Rs 2,500 for total income up to Rs 3.5 lakh for FY 2018-19

– Rs 12,500 for total income up to Rs 5 lakh for FY 2019-20

• vestments upto ₹ 1.5 lacs under Sec 80C can save ₹ 46,800 in taxes. Invest Now

Note : An additional 4% Health & education cess will be applicable on the tax amount calculated as above.

Let’s understand the tax calculation for rebate with the help of an example:

Income Tax Slabs for Senior Citizens (60 Years Old Or More but Less than 80 Years Old) for FY 2019-20 – Part II

Note : An additional 4% Health & education cess will be applicable on the tax amount calculated as above.

Let’s understand the tax calculation for rebate with the help of an example:

Income Tax Slabs for Super Senior Citizens(80 Years Old Or More) for FY 2019-20 – Part III

Note : An additional 4% Health & education cess will be applicable on the tax amount calculated as above.

Let’s understand the tax calculation for a rebate with the help of an example:

Surcharge applicable to the individuals covered in Part I, II and III:

Income Tax Slabs for Domestic Companies for FY 2019-20 – Part IV

In addition cess and surcharge is levied as follows:

Cess: 4% of corporate tax

Surcharge applicable:

However, the rate of surcharge in case of a company opting for taxability under Section 115BAA or Section 115BAB shall be 10% irrespective of amount of total income.

Tax slabs and tax rates for AY 2019-20 (FY 2018-19):

Income Tax Slabs for Individual Tax Payers & HUF (Less Than 60 Years Old) for FY 2018-19 – Part I

Note : An additional 4% Health & education cess will be applicable on the tax amount calculated as above.

Income Tax Slabs for Senior Citizens (60 Years Old Or More but Less than 80 Years Old) for FY 2018-19 – Part II

Note : An additional 4% Health & education cess will be applicable on the tax amount calculated as above.

Income Tax Slabs for Super Senior Citizens(80 Years Old Or More) for FY 2018-19 – Part III

Note: An additional 4% Health & education cess will be applicable on the tax amount calculated as above.

Surcharge applicable to the individuals covered in Part I, II and III:

Income Tax Slabs for Domestic Companies for FY 2018-19 – Part IV

In addition cess and surcharge is levied as follows: Cess: 4% of corporate tax

Surcharge applicable:

Frequently Asked Questions ( FAQ’s )

How does the government collect the taxes?

Taxes are collected by the Government through three means:

a) voluntary payment by taxpayers into various designated Banks. For example, Advance Tax and Self Assessment Tax paid by the taxpayers,

b) Taxes deducted at source [TDS] from the income of the receiver, c)Taxes collected at source [TCS].

What is the time period considered for the purpose of income tax?

Income-tax is levied on the annual income of a person. The year under the Income-tax Law is the period starting from 1st April and ending on 31st March of next calendar year. The Income-tax Law classifies the year as (i) Previous year, and (ii) Assessment year.

On the Challan, what does income tax on companies and income tax other than companies mean?

Income tax on companies is called a corporate tax. A company has to choose (Corporation tax)-0020 to pay their corporate tax. Similarly, a non-corporate assessee paying income tax should choose income tax (other than Companies)-0021.

Is the due date for filing tax return same for all the taxpayers?

No, the due date for all the taxpayers is not the same. For individual taxpayers the due date is 31st July of the assessment year.