Income Tax Slab Rates for FY 2020-21 (Budget 2020 IT Slab Rates)
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In Indian Taxation System of Direct Tax, Rate of Tax depends on the slabs of the Income of Tax payers.
Different Rates has been defined for different slabs of Income. The general principal is higher the slab higher the tax rates. Further, the rate of Tax also depends on the legal structure such as individual, Partnership, LLP, Private Limited, Charitable Trust etc. The Rate of Tax for individual Tax payers generally changes in every budget. Further for the purpose of tax rate the individual is categorised as under: –
- Individuals below the age of 60 years (includes resident as well as non-resident)
- Resident Senior citizens (between 60 – 80 years of ages)
- Resident Super senior citizens (above 80 years of age)
Budget 2020, has widened the tax slabs and reduced the tax rates, new tax regime has been introduced by way of insertion of new section 115BAC. The Tax Payers (i.e. individual and HUF) has option to choose between the old and new tax regime. Basically the tax payer who opt for new tax regime has to forgo the exemption and deduction but get the benefit of reduced rate of tax under certain slabs and the tax payer under old tax regime is eligible for exemption and deduction as per the provision of the Income Tax Law however the rate of tax is higher in certain slabs.
Income Tax Slabs and Income Tax Rate for individuals below the age of 60 years – Income Tax slabs and Rates are applicable from FY 2020-21 (AY 2021-22)
Option 1 (Old Tax Regime) | Options 2 (New Tax Regime) | ||
Income Slabs | Tax Rate | Income Slabs | Tax Rate |
Up to Rs 2.5 lakh | NIL | Up to Rs 2.5 lakh | NIL |
Rs 2.5 lakh to Rs 5 lakh | 5% of income more than Rs 2.5 Lakh + 4% Cess | Rs 2.5 lakh to Rs 5 lakh | 5% of income more than Rs 2.5 Lakhs + 4% Cess on the Tax Amount |
Rs 5 lakh to Rs 10 Lakh | 20% of income more than Rs 5 Lakhs + Rs 12,500 + 4% Cess | Rs 5 lakh to Rs 7.5 lakh | 10% of income more than Rs 5 Lakh + Rs 12,500+ 4% Cess on Tax amount |
Rs 7.5 lakh to Rs 10 lakh | 15% of income more than Rs 7.5 Lakh + Rs 37,500 + 4% Cess on Tax amount | ||
Above Rs 10 Lakh | 30% of Income above Rs 10 Lakhs + Rs 1,12,500 + 4% Cress | Rs 10 lakh to Rs 12.5 lakh | 20% of income more than Rs 10 Lakh + Rs 75,000 + 4% Cess on Tax amount |
Rs 12.5 lakh to Rs 15 lakh | 25% of income more than Rs 12.5 Lakh + Rs 1,25,000 + 4% Cess on Tax amount | ||
Rs 15 lakh and above | 30% of Income above Rs 15 Lakh + Rs 62,500 + 4% Cess on Tax amount |
- The Tax Payer are given options to opt for the taxation scheme. The option shall be exercised on or before the date of filing the return of Income for AY 2021-22 (FY 2020-21)
- The Tax payer opting for new tax regime will have to forgo the deductions and exemption claimed which are available in old Tax regime. In nutshell, of about 70 exemption and deduction are required to be forgone if a person opt for new taxation regime, out of which the general claims and deductions are as under: –
- Standard Deduction: – Rs 50,000
- Professional Tax
- Conveyance
- Children Education
- HRA: – Depends on the city and the salary structure
- Housing loans: – Rs 2 Lakh and Rs 3.5 Lakhs for affordable housing
- Investment under section 80C: – 1.5 Lakh
- Medical Insurance Premium: – Rs 25,000 (Rs 50,000 for Parents and senior citizen)
- Saving Bank Interest: – Rs 10,000 under Section 80TTA (for senior citizen Rs 50,000 under Section 80TTB)
- Donation to specified entities: – 50-100% of the amount donated.
- Disability of Self or dependant
- The rebate of Rs 12,500 under section 87A of the Income Tax Act is available in both the tax regime. Effectively, this means that individual tax payer having net taxable income uptoRs 5 Lakhs will continue to pay zero. The rebated can be claimed only if a person is resident individual and the rebate calculation is applied before the effect of tax on cess 4% is given.
- The new scheme is optional and you will have to opt in following manner: –
Individual and HUF does not have Business Income : – The option is to be exercised for every yearalong with the filing of the return of income under section 139(1) for the year.
Individual and HUF having Business Income : – The option is to be exercised on or before the due date of filing the return of income. If individual or HUF having business income has opted to begoverned by the new scheme, then, subsequently, he can optout only once and thereafter, he will never be eligible to optfor the new scheme again except when he ceases to have anybusiness income.
- Surcharge is applicable to Individual / HUF in the following manner: –
Total Income | Rate on Surcharge on the Income Tax |
Is more than 50 Lakhs but less than or equal to Rs 1 Crore | 10% |
Is more than 1Crore | 15% |
Income Tax Slabs and Income Tax Rate for individuals 60 years old or more and less than 80 years old – Income Tax slabs and Rates are applicable from FY 2020-21 (AY 2021-22)
Option 1 (Old Tax Regime) | Options 2 (New Tax Regime) | ||
Income Slabs | Tax Rate | Income Slabs | Tax Rate |
Up to Rs 3 lakh | NIL | Up to Rs 2.5 lakh | NIL |
Rs 3 lakh to Rs 5 lakh | 5% of income more than Rs 2.5 Lakh + 4% Cess | Rs 2.5 lakh to Rs 5 lakh | 5% of income more than Rs 2.5 Lakhs + 4% Cesson Tax amount |
Rs 5 lakh to Rs 10 Lakh | 20% of income more than Rs 5 Lakhs + Rs 12,500 + 4% Cess | Rs 5 lakh to Rs 7.5 lakh | 10% of income more than Rs 5 Lakh + Rs 12,500+ 4% Cesson Tax amount |
Rs 7.5 lakh to Rs 10 lakh | 15% of income more than Rs 7.5 Lakh + Rs 37,500 + 4% Cesson Tax amount | ||
Above Rs 10 Lakh | 30% of Income above Rs 10 Lakhs + Rs 1,12,500 + 4% Cress | Rs 10 lakh to Rs 12.5 lakh | 20% of income more than Rs 10 Lakh + Rs 75,000 + 4% Cesson Tax amount |
Rs 12.5 lakh to Rs 15 lakh | 25% of income more than Rs 12.5 Lakh + Rs 1,25,000 + 4% Cesson Tax amount | ||
Rs 15 lakh and above | 30% of Income above Rs 15 Lakh + Rs 62,500 + 4% Cesson Tax amount |
Income Tax Slabs and Income Tax Rate for individuals 80 years old or more– Income Tax slabs and Rates are applicable from FY 2020-21 (AY 2021-22)
Option 1 (Old Tax Regime) | Options 2 (New Tax Regime) | ||
Income Slabs | Tax Rate | Income Slabs | Tax Rate |
Up to Rs5 lakh | NIL | Up to Rs 2.5 lakh | NIL |
Rs 2.5 lakh to Rs 5 lakh | 5% of income more than Rs 2.5 Lakhs + 4% Cesson Tax amount | ||
Rs 5 lakh to Rs 10 Lakh | 20% of income more than Rs 5 Lakhs + Rs 12,500 + 4% Cess | Rs 5 lakh to Rs 7.5 lakh | 10% of income more than Rs 5 Lakh + Rs 12,500+ 4% Cesson Tax amount |
Rs 7.5 lakh to Rs 10 lakh | 15% of income more than Rs 7.5 Lakh + Rs 37,500 + 4% Cesson Tax amount | ||
Above Rs 10 Lakh | 30% of Income above Rs 10 Lakhs + Rs 1,12,500 + 4% Cress | Rs 10 lakh to Rs 12.5 lakh | 20% of income more than Rs 10 Lakh + Rs 75,000 + 4% Cesson Tax amount |
Rs 12.5 lakh to Rs 15 lakh | 25% of income more than Rs 12.5 Lakh + Rs 1,25,000 + 4% Cesson Tax amount | ||
Rs 15 lakh and above | 30% of Income above Rs 15 Lakh + Rs 62,500 + 4% Cesson Tax amount |
Income Tax Slabs for AOP/BOIetc
Income Slabs | Tax Rate |
Up to Rs 2.5 lakh | NIL |
Rs 2.5 lakh to Rs 5 lakh | 5% of income more than Rs 2.5 Lakh + 4% Cess |
Rs 5 lakh to Rs 10 Lakh | 20% of income more than Rs 5 Lakhs + Rs 12,500 + 4% Cess |
Above Rs 10 Lakh | 30% of Income above Rs 10 Lakhs + Rs 1,12,500 + 4% Cess |
Income Tax Rates for Partnership/LLP and Co-operative Society (AY 2021-22) (FY 2020-21)
Legal Structure | Income Slabs | Tax Rate | Cess | Surcharge | Effective Tax Rate |
Partnership Firm/LLP | Income Upto 1 Crore | 30% | 4% | 0% | 31.20% |
Income more than 1 Crore | 30% | 4% | 12% | 34.94% | |
Co-operative societies opting for taxation under section 115BAD | Any income as it is taxable at Flat tax Rates | 22% | 4% | 10% | 25.168% |
Other Co-operative Society | Income Upto 1 Crore | 30% | 4% | 0% | 31.20% |
Income more than 1 Crore | 30% | 4% | 12% | 34.94% |