Income Tax Slabs & Rates 2020-2021

The Finance Minister introduced new tax regime in Union Budget, 2020 wherein there is an option for individuals and HUF (Hindu Undivided Family) to pay taxes at lower rates without claiming deductions under various sections. The following Income Tax slab rates are notified in new tax regime vs old tax regime:
Income Tax Slab Tax Rates As Per New Regime Tax Rates As Per Old Regime
₹0 - ₹2,50,000 Nil Nil
₹2,50,001 - ₹ 5,00,000 5% 5%
₹5,00,001 - ₹ 7,50,000 ₹12500 + 10% of total income exceeding ₹5,00,000 ₹12500 + 20% of total income exceeding ₹5,00,000
₹7,50,001 - ₹ 10,00,000 ₹37500 + 15% of total income exceeding ₹7,50,000 ₹62500 + 20% of total income exceeding ₹7,50,000
₹10,00,001 - ₹12,50,000 ₹75000 + 20% of total income exceeding ₹10,00,000 ₹112500 + 30% of total income exceeding ₹10,00,000
₹12,50,001 - ₹15,00,000 ₹125000 + 25% of total income exceeding ₹12,50,000 ₹187500 + 30% of total income exceeding ₹12,50,000
Above ₹ 15,00,000 ₹187500 + 30% of total income exceeding ₹15,00,000 ₹262500 + 30% of total income exceeding ₹15,00,000

New tax regime slab rates are not differentiated based on age group. However, under old tax regime the basic income threshold exempt from tax for senior citizen (aged 60 to 80 years) and super senior citizens (aged above 80 years) is ₹ 3 lakh and ₹ 5 lakh respectively.

However, under new tax regime person cannot claim up to 70 income tax deductions while calculating taxes. Hence, every person has to make his/her own calculation as per old and new tax regime and calculate which one is beneficial based on type of investments made and returns earned on those investments.

Consider an example, a person aged 35 years has the total income of ₹ 11, 00,000 and has made the investment under section 80C of ₹ 1, 50,000 and under Section 80CCD of ₹ 50,000. He has claimed income tax deduction with medical and Leave travel allowance of ₹ 50000 and HRA of ₹ 1,50,000 The tax payable under new and old tax regime is as follows:
Particulars New Regime Old Regime
Gross total income ₹ 11,00,000 ₹ 11,00,000
Less: Deductions under 80C ₹ 0 ₹ 1,50,000
Less: Standard Deduction (Medical & Travel Allowance) ₹ 0 ₹ 50,000
Less: Deductions under 80CCD ₹0 ₹ 50,000
Less : HRA deduction as per section 10(13A) ₹ 0 ₹ 1,50,000
Taxable Income ₹ 11,00,000 ₹ 7,00,000
     
Taxes payable as per slab rates    
₹0 - ₹2,50,000 ₹ 0 ₹ 0
₹2,50,001 - ₹ 5,00,000 ₹ 12,500 ₹ 12,500
₹5,00,001 - ₹ 7,50,000 ₹ 25,000 ₹ 40,000
₹7,50,001 - ₹ 10,00,000 ₹ 37,500 ₹ 0
₹10,00,001 - ₹12,50,000 ₹ 20,000 ₹ 0
Total taxes ₹ 95,000 ₹ 52,500

Income Tax Slabs and Rates for Financial Year: 2019-20

Select your Age Group

Income Tax Slab Individuals below the age of 60 years
Up to ₹ 2,50,000 Nil
₹ 2,50,001 to 5,00,000 5%
₹ 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
Income Tax Slab Individuals below the age of 60 years
Up to ₹ 3,00,000 Nil
₹ 3,00,001 to 5,00,000 5%
₹ 5,00,001 to 10,00,000 ₹ 10,000 + 20% of total income exceeding ₹ 5,00,000
Above ₹ 10,00,000 ₹ 1,10,000 + 30% of total income exceeding ₹ 10,00,000
Income Tax Slab Individuals below the age of 60 years
Up to ₹ 5,00,000 Nil
₹ 5,00,001 to 10,00,000 20%
Above ₹ 10,00,000 ₹ 1,00,000 + 30% of total income exceeding ₹ 10,00,000
Now, let’s examine the salary components of Ravi, Ramesh & Rahul to get a clear picture
 
  Particulars (₹) Ravi Ramesh Rahul
  Annual Salary 5,00,000 10,00,000 15,00,000
  Less: Standard Deduction (Medical & Travel Allowance) 50,000 50,000 50,000
  Less : Deduction u/s 80C 80,000 1,50,000 1,50,000
  Less : HRA deduction as per section 10(13A) 92,000 1,00,000 1,50,000
  Gross Taxable Income (GTI) 7,00,000 7,00,000 11,50,000
         
  Tax computation on GTI
  Up to ₹2,50,000 - - -
  ₹ 2,50,001 to 5,00,000 1,400 12,500 12,500
  ₹ 5,00,001-10,00,000 - 40,000 1,00,000
  Above ₹ 10,00,001 - - 45,000
A Total tax 1,400 52,500 1,57,500
B Less Rebate u/s 87A 1,400 - -
C Add: Health & Education Cess @ 4% on (A-B) - 2,100 6,300
  Tax Payable (A-B+C) - 54,600 1,63,800

Latest Income Tax Slabs and Rates proposed for Financial year 2019-20

As per interim budget 2019, Individual taxpayers having taxable annual income up to ₹ 5 lakh will get full tax rebate u/s 87A and therefore will not be required to pay any income tax. However Income tax Slabs and Rates will remain unchanged for the FY2019-20.

Income Tax Slabs FAQ’s

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

No. The due date for filing income tax return is not the same for all tax payers. In case of Individuals & HUF, who are not required to get audited, the due date for filing the return is 31st July.

✅ What is the time period considered for the purposes of income tax?

Income tax is calculated on annual basis in India. It is calculated for the financial year starting from 1st April and ending on 31st March.

✅ Who decides the IT slab rates and can they change?

Yes, IT slab rates can be changed. If there are changes in IT slab rates for the financial year then they are introduced in the Budget for that year and presented in Parliament.

✅ Do I need to file Income Tax Return (ITR) if my annual income is below Rs.2.5 lakh?

The taxation process is dependent on a number of factors. Please get in touch with a personal tax advisor.

✅ Are there separate slab rates for males and females?

No. The slab rates for males and females are the same.

✅ Are there separate slab rates for different age groups?

Yes. There are separate slab rates for tax payers aged below 60 years, between 60 to 80 years (senior citizens) and above 80 years (super senior citizens).

✅ Will my income be taxed if I am an agriculturist?

The agricultural income is exempt from income tax. However, if an agriculturist has non-agricultural income then it would be taxable.
COMP/DOC/Jan/2020/101/3078
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Please note that the tax write-up above is for general understanding and reference. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information. Tax benefits/savings are subject to conditions of Section 80C, 80CCC, 80CCE, 10(10A), 10(10D) and other provisions of the Income Tax Act, 1961. Tax laws are subject to amendments from time to time. ICICI Prudential Life Insurance Company Limited expressly disclaims any liability to any person, if tax benefits stated above are denied to the customer

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^ Tax benefit of ₹ 54,600 (₹ 46,800 u/s 80C & ₹ 7,800 u/s 80D) is calculated at highest tax slab rate of 31.2% (including Cess excluding surcharge) on life insurance premium u/s 80C of ₹ 1,50,000 and health premium u/s 80D of ₹ 25,000. Tax benefits under the policy are subject to conditions under Section 80C, 80D, 10(10D) and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.

Tax benefits under the policy are subject to conditions under Section 80C, 80D, 10(10D) and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.

Unlike traditional products, Unit Linked insurance products are subject to market risk, which affect the Net Asset Values & the customer shall be responsible for his/her decision. The names of the Company, Product names or fund options do not indicate their quality or future guidance on returns. Funds do not offer guaranteed or assured returns.

Please note that the tax write-up above is for general understanding and reference. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information. Tax benefits/savings are subject to conditions of Section 80C, 80CCC, 80CCE, 10(10A), 10(10D) and other provisions of the Income Tax Act, 1961. Tax laws are subject to amendments from time to time. ICICI Prudential Life Insurance Company Limited expressly disclaims any liability to any person, if tax benefits stated above are denied to the customer

Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.

^Source: http://economictimes.indiatimes.com/wealth/tax/latest-income-tax-slabs/articleshow/56201289.cms

ADVT No - W/II/3266/2018-19

COMP/DOC/Feb/2020/62/3202