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Income Tax Slabs and Rates in India for FY 2019-20

Income Tax Slabs and Rates in India for FY 2019-20

Paying income tax is the duty of every earning citizen in India. The money paid in taxes is used by the government towards the development of the country. However, not everyone has to pay the same amount of tax. An individual needs to pay taxes according to his or her income tax slab.

What is an income tax slab?

The tax liability of an individual in India depends on the amount of their annual income. It is divided in different slabs, depending on the annual earnings. The payable tax rate increases based on the growth of the slab. The government has fixed income tax rates on the different slabs, and you must know about them before start paying your taxes.

One thing to keep in mind is that the tax slabs often change during the budget. Hence, keeping yourself updated about it every year is necessary.

New income tax slabs and rates for the financial year 2019-20

The new income tax slabs in India differ as per the taxpayer’s age. These fall under three categories:

1. Individuals who are younger than the age of 60
2. Senior citizens who are older than 60 years but younger than 80-years
3. Super senior citizens who are older than 80 years

Income Tax rates for individuals below 60 years of age for FY 2019-20:

Taxable income Tax Rates in India for individuals below 60 years
INR 0 to INR 2,50,000 Nil
INR 2,50,000 to INR 5,00,000 5%
INR 5,00,000 to INR 10,00,000 ₹12,500 + 20% of total income exceeding ₹5,00,000
Above INR 10,00,000 ₹1,12,500 + 30% of total income exceeding ₹10,00,000

Income tax slabs for senior Citizens for FY 2019-20

Taxable income Tax Rates in India for Senior Citizen (Aged 60 but less than 80)
INR 0 to INR 3,00,000 Nil
INR 3,00,000 to INR 5,00,000 5%
INR 5,00,000 to INR 10,00,000 ₹10,000 + 20% of total income exceeding ₹5,00,000
Above INR 10,00,000 ₹1,10,000 + 30% of total income exceeding ₹10,00,000

Income Tax Slabs for Super Senior Citizens for FY 2019-20

Taxable income Tax Rates in India for Super Senior Citizens (Aged 80 years and above)
INR 0 to INR 5,00,000 Nil
INR 5,00,000 to INR 10,00,000 20%
Above INR 10,00,000 ₹1,00,000 + 30% of total income exceeding ₹10,00,000

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Examples of Tax computation to understand the New Income Tax Slab for FY 2019-20:

Here are three examples that will help you understand the new income tax slabs for AY 2019-20 better:

Imagine the annual salary of Rahul, a 25-year old individual, is INR 5 lakh. After the standard deduction and the deductions and the income tax deductions under Section 80 and Section 10(13A) of the Income Tax Act, 1961, his taxable income stands to be INR 2.78 lakh. As the income over INR 2.5 lakh is taxed at 5%, his total due tax comes to INR 1,400. However, according to Interim Budget 2019, as per Section 87A of the Income Tax Act, 1961, Rahul gets full tax rebate his annual income is up to INR 5 lakh.

Now, assume the yearly salary of Aditya, a 35-year old individual, is INR 10 lakh. After the deductions under Section 80C and Section 10(13A) and the standard deductions, his taxable income stands to be INR 7 lakh. As income over INR 5 lakh is taxed at INR 12,500 + 20%, his total due tax comes to INR 52,500. Aditya will also be charged 4% Health & Education Cess, which increases the tax amount to INR 54,600.

Similarly, in another instance, the annual salary of Roshni, a 40-year old individual, is INR 15 lakh after the standard deduction and the deductions under Section 80C and Section 10(13A) her taxable income comes to be INR 11.5 lakh. As income over INR 10 lakh is taxed at INR 1,12,500 + 30%, her total due tax comes to INR 1,57,500. After adding the 4% Health & Education Cess, Roshni will have to pay the tax amount of INR 1,63,800.

Now that you are aware of the new income tax slabs for FY 2019-20, it will be easier for you to calculate how much tax you are supposed to pay annually.

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