Income Tax Slabs for the individual in India in FY 2020-21 & 2019-20
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(FY 2018-19), AY 2020-21( FY 2019-20) and AY 2021-22 (FY 2020-21). 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)
|Income Tax Slab||Tax Rate|
|Up to Rs 2.5 lakh||NIL|
|Rs 2.5 lakh to Rs 5 lakh||5% (Tax rebate of Rs 12,500 available under section 87A)|
|Rs 5 lakh to Rs 7.5 lakh||10%|
|Rs 7.5 lakh to Rs 10 lakh||15%|
|Rs 10 lakh to Rs 12.5 lakh||20%|
|Rs 12.5 lakh to Rs 15 lakh||25%|
|Rs 15 lakh and above||30%|
- 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)
- 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
|Income Tax Slab||Tax Rate for Individual & HUF Below the Age Of 60 Years|
|Up to ₹2,50,000*||Nil|
|₹2,50,001 to ₹5,00,000||5% of total income exceeding ₹2,50,000|
|₹5,00,001 to ₹10,00,000||₹12,500 + 20% of total income exceeding ₹5,00,000|
|Above ₹10,00,000||₹1,12,500 + 30% of total income exceeding ₹10,00,000|
- 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
- Investments upto ₹ 1.5 lacs under Sec 80C can save ₹ 46,800 in taxes.
Note: An additional 4% Health & education cess will be applicable to the tax amount calculated as above.