Rates of Income Tax – FY 2019-20 (AY 2020-21)

Rules of Income Tax Act are subjected to periodical revisions. Accordingly, the rates of income tax also undergo periodical changes. Different tax rates have been stipulated for various categories of taxpayers and for different sources of income. Individual/Hindu Undivided Family (HUF)/ Association of Persons (AOP)/ Body of Individuals (BOI) or any other artificial judicial person is taxed as per different slab rates. The same rates are applicable to individuals whose income is from Salaries and allowances.

The rates of income tax mentioned below are applicable to the Financial Year 2019-20 (Assessment Year 2020-21) ie FY 2019-20 (AY 2020-21)

1.Rates of Income Tax – Slab rates for Individuals/HUF/AOP/BOI/Artificial Judicial Person for FY 2019-20 (AY 2020-21)

The individual in this category mean both resident and non-resident if the said person is born on or after April 01, 1960.

2. Rates of Income Tax -For Resident Senior Citizens -FY 2019-20 (AY 2020-21)

(born during April 01, 1940 and March 31, 1960) 

3. Rates of Income Tax –For Resident  super Senior Citizens -FY 2019-20 (AY 2020-21)

(who is 80 years or more at any time during the previous year- Born prior to April 01,1940)

3. Rates of Income Tax FY 2019-20 (AY 2020-21)- Rebate under Section 87 A for FY 2019-20 (AY 2020-21)

A resident Individual, whose total income  does not exceed Rs. 5,00,000 is entitled to a rebate of maximum Rs. 12,500.  The amount of rebate is 100% of income tax or Rs.12,500, whichever is less.

Rebate under Section 87 A is applicable only for resident individuals and not available for AOP, BIO & HUF, whether resident or not.

Note:- In FY 2018-19 (AY 2019-20), the rebate under Section 87 A was allowed for an individual whose total income did not exceed Rs. 3,50,000 and the maximum rebate was Rs. 2,500. This is the only change in  the rate of income tax compared to FY 2018-19.  

4. Rates of Income Tax -Surcharge on Income Tax  for FY 2019-20 (AY 2020-21) 

a. If the total income of the assesse exceeds Rs. 50 Lakhs but does not exceed Rs. 1 Crore, a surcharge of 10 %  is payable on such tax , where total income exceeds fifty lakh rupees but does not exceed one crore rupees.However, the surcharge shall be subject to marginal relief (where income exceeds fifty lakh rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of fifty lakh rupees by more than the amount of income that exceeds fifty lakh rupees).

b. If the total  income of the assesse exceeds Rs. 1Crore, a  surcharge of 15 %  is payable on such Tax , where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).

5. Rates of Income Tax-Health and Education Cess for FY 2019-20 (AY 2020-21)

The amount of income tax and the applicable surcharge shall be further increased by health and education cess calculated at the rate of four percent (4%) of such income-tax and surcharge. In the case of employees, it becomes a part of TDS.

Amount of  tax payable can be reduced by investments permitted under Section 80 C of Income Tacx Act . Benefit is also extended for interest paid on housing loans and other permitted tax savers. 

6. Standard Deduction for FY 2019-20 (AY 2020-21)

Finance Bill, 2018 had introduced Standard Deduction amounting to Rs. 40,000 from Gross Salary as a benefit to the Salaried Employees. For FY 2019-20 (AY 2020-21), standard deduction has been increased by Rs.10,000. Standard deduction allowable for the FY 2019-20 is Rs. 50,000.