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.

Such tax slabs tend to undergo a change during every budget.

Further, Budget 2020 has announced a new income tax regime following which individuals will have the option to pay taxes as per new tax slabs from FY 2020-21 onwards.

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 80 years of age)
  • Resident Super senior citizens (above 80 years of age)

Income Tax Slabs for different financial years

Income Tax Slabs for individuals below 60 years of age under new tax regime – Applicable to 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.

    1. Leave Travel Allowance (LTA)

    2. House Rent Allowance (HRA)

    3. Conveyance

    4. Daily expenses in the course of employment

    5. Relocation allowance

    6. Helper allowance

    7. Children education allowance

    8. Other special allowances [Section 10(14)]

    9. Standard deduction

    10. Professional tax

    11. Interest on housing loan (Section 24)

    12. 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:

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

    2. In case of a taxpayer having business income, the option once exercised can be withdrawn only once. Further, if the taxpayer withdraws the option, he will never be able to opt-in the option again.

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

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

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

Source of income (FY 2019-20) Income (Rs)
Salary (6,50,000)
Less: Standard deduction ( 50,000) 6,00,000
Interest on fixed deposit 50,000
Gross total income 6,50,000
Less: Deduction under section 80C 1,50,000
Total income 5,00,000
Income-tax (@ 5% from Rs 2.5 to 5 lakh) 12,500
Less: Rebate u/s 87A 12,500
NIL

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

Income Tax Slabs Tax Rate for Senior cetizens aged 60 Years But Less than 80 Years
Income up to Rs 3,00,000* No tax
Income from Rs 3,00,000 – Rs 5,00,000 5%
Income from Rs 5,00,000 – 10,00,000 20%
Income more than Rs 10,00,000 30%

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

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

Source of income (FY 2019-20) Income (Rs)
Salary (4,00,000)
Less: Standard deduction ( 50,000) 3,50,000
Income from house property 2,50,000
Interest on fixed deposit 50,000
Gross total income 6,50,000
Less: Deduction under section 80C 1,50,000
Total income 5,00,000
Income-tax (@ 5% from Rs 3 to 5 lakh) 10,000
Less: Rebate u/s 87A 10,000
NIL

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

Income Tax Slabs Tax Rate for Super Senior Citizens (Aged 80 Years And Above)
Income up to Rs 5,00,000* No tax
Income from Rs 5,00,000 – 10,00,000 20%
Income more than Rs 10,00,000 30%

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

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

Source of income (FY 2019-20) Income (Rs)
Salary (3,50,000)
Less: Standard deduction ( 50,000) 3,00,000
Income from house property 2,50,000
Interest on fixed deposit 1,00,000
Gross total income 6,50,000
Less: Deduction under section 80C 1,50,000
Total income 5,00,000
Income-tax (nil below Rs 5 lakh) NIL
Less: Rebate u/s 87A NIL
NIL

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

Turnover Particulars Tax Rate
Gross turnover upto 400 Cr. in the FY 2017-18 25%
Gross turnover exceeding 400 Cr. in the FY 2017-18 30%
Where the company opted for Section 115BA 25%
GWhere the company opted for Section 115BAA 22%
Where the company opted for Section 115BAB 15%

In addition cess and surcharge is levied as follows:

Cess: 4% of corporate tax

Surcharge applicable:

Income Limit Surcharge Rate on the amount of income tax
Net income exceeds Rs.1 Crore but doesn’t exceed Rs.10 Crore 7%
Net income exceeds Rs.10 Crore 12%

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.

Income Tax Slabs Rates for FY 2018-19(AY 19-20)

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

Income Tax Slabs 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

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

Income Tax Slabs Tax Rate for 60 Years Old Or More but Less than 80 Years Old
Income up to Rs 3,00,000* No tax
Income from Rs 3,00,000 – Rs 5,00,000 5%
Income from Rs 5,00,000 – 10,00,000 20%
Income more than Rs 10,00,000 30%

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

Income Tax Slabs Tax Rate for Super Senior Citizens (Aged 80 Years And Above)
Income up to Rs 5,00,000* No tax
Income from Rs 5,00,000 – 10,00,000 20%
Income more than Rs 10,00,000 30%

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 limit Surcharge Rate on the amount of income tax
Net income exceeds Rs.50 Lakhs but doesn’t exceed Rs. 1 Crore 10%
Net income exceeds Rs.1 Crore  15%

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

Turnover Particulars Tax Rate
Gross turnover upto 250 Cr. in the FY 2016-17 25%
Gross turnover exceeding 250 Cr. in the FY 2016-17 30%

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

Surcharge applicable:

Income Limit Surcharge Rate on the amount of income tax
Net income exceeds Rs.1 Crore but doesn’t exceed Rs.10 Crore 7%
Net income exceeds Rs.10 Crore 12%

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?

    The tax that is to be paid by the companies on their income is called as corporate tax, and for payment of same in the challan it is mentioned as Income-tax on Companies (Corporation tax)-0020. Tax paid by non-corporate assessees is called as Income-tax, and for payment of the same in the challan it is to be mentioned as 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.