Latest Update:
- ITR for the AY 2019-20 (FY 2018-19) can be filed and revised upto 30th June, 2020 amid COVID-19 Pandemic. (Last Opportunity)
- Amid COVID-19 Pandemic in the country the Finance Minister Mrs. Nirmala Sitharaman has announced an extension for filing the Income Tax Return for the AY 2021-20 from 31st July, 2020 and 30th September, 2020 to 30th November, 2020 and 31st October, 2020 Respectively. For more details click https://www.casanchar.com/blog/relaxations-under-the-income-tax-act-1961-amid-covid-19-pandemic/
The Income Tax that is charged on the Income of an Individual in India is as per the slab rate system, these income tax slabs are subject to change (if any) as per the Finance Act for the Relevant Financial. Now we are going to discuss about the income tax slabs for the AY 2020-2021(FY 2019-2020) applicable to the Individuals under The Income Tax Act.
Categories of Individuals for the purpose of slab rates of Income Tax;
The Income Tax Act has divided the individual taxpayers in the following three categories for the purpose of tax slabs;
- Individuals below the age of 60 Years (Residents and Non Residents)
- Resident Senior Citizens (Above 60 years and below 80 years)
- Resident Super Senior Citizens (Above 80 years of age)
Income Tax slab for the AY 2020-2021(FY 2019-2020)*
- For Individuals below 60 Years of age
| Income Slab | Applicable Tax Rate |
| Upto ₹ 2,50,000 | Nil |
| ₹ 2,50,001 – ₹ 5,00,000 | 5% |
| ₹ 5,00,001 – ₹ 10,00,000 | 20% |
| Above ₹ 10,00,000 | 30% |
*Explanation
- No Tax on the individual having income upto ₹ 2,50,000
- 5% Tax will applicable for the income more than ₹ 2,50,000 upto ₹ 5,00,000
- 20% Tax will applicable for the income more than ₹ 5,00,000 upto ₹ 10,00,000
- 30% Tax will applicable for the income more than ₹ 10,00,000
- Rebate of ₹12,500 under section 87A is available to the individuals having income upto ₹ 5,00,000.
- Tax deduction of Rs. 1.5 Lakhs can be availed under Section 80C and an amount of tax equal to ₹46,800 can be saved (Contact us to invest in the eligible investments)
- 4% Health and Education cess will be applicable on the amount of tax so calculated.
- No Tax on the individual having income upto ₹ 5,00,000
- 20% Tax will applicable for the income more than ₹ 5,00,000 upto ₹ 10,00,000
- 30% Tax will applicable for the income more than ₹ 10,00,000
- 4% Health and Education cess will be applicable on the amount of tax so calculated.
- Surcharge will be applicable as per the below mentioned slab
| Income Slab | Surcharge on the amount of Tax |
| If net income exceeds Rs. 50 lakh but upto Rs. 1 Cr | 10% |
| If net income exceeds Rs. 1Cr but upto Rs. 2 Cr | 15% |
| If net income exceeds Rs. 2 Cr but upto Rs. 5 Cr | 25% |
| If net income exceeds Rs. 5 Cr | 37% |
- For Senior Citizens above 60 Years of age but below 80 Years*
| Income Slab | Applicable Tax Rate |
| Upto ₹ 3,00,000 | Nil |
| ₹ 3,00,001 – ₹ 5,00,000 | 5% |
| ₹ 5,00,001 – ₹ 10,00,000 | 20% |
| Above ₹ 10,00,000 | 30% |
- No Tax on the individual having income upto ₹ 3,00,000
- 5% Tax will applicable for the income more than ₹ 3,00,000 upto ₹ 5,00,000
- 20% Tax will applicable for the income more than ₹ 5,00,000 upto ₹ 10,00,000
- 30% Tax will applicable for the income more than ₹ 10,00,000
- 4% Health and Education cess will be applicable on the amount of tax so calculated.
- No Tax on the individual having income upto ₹ 5,00,000
- 20% Tax will applicable for the income more than ₹ 5,00,000 upto ₹ 10,00,000
- 30% Tax will applicable for the income more than ₹ 10,00,000
- 4% Health and Education cess will be applicable on the amount of tax so calculated.
- Surcharge will be applicable as per the below mentioned slab
| Income Slab | Surcharge on the amount of Tax |
| If net income exceeds Rs. 50 lakh but upto Rs. 1 Cr | 10% |
| If net income exceeds Rs. 1Cr but upto Rs. 2 Cr | 15% |
| If net income exceeds Rs. 2 Cr but upto Rs. 5 Cr | 25% |
| If net income exceeds Rs. 5 Cr | 37% |
- For Super Senior Citizens above 80 Years of age
| Income Slab | Applicable Tax Rate |
| Upto ₹ 5,00,000 | Nil |
| ₹ 5,00,001 – ₹ 10,00,000 | 20% |
| Above ₹ 10,00,000 | 30% |
- No Tax on the individual having income upto ₹ 5,00,000
- 20% Tax will applicable for the income more than ₹ 5,00,000 upto ₹ 10,00,000
- 30% Tax will applicable for the income more than ₹ 10,00,000
- 4% Health and Education cess will be applicable on the amount of tax so calculated.
- Surcharge will be applicable as per the below mentioned slab
| Income Slab | Surcharge on the amount of Tax |
| If net income exceeds Rs. 50 lakh but upto Rs. 1 Cr | 10% |
| If net income exceeds Rs. 1Cr but upto Rs. 2 Cr | 15% |
| If net income exceeds Rs. 2 Cr but upto Rs. 5 Cr | 25% |
| If net income exceeds Rs. 5 Cr | 37% |
- To understand the concept of slab rates better let us take an example;
Mr. X (age 35 years) is having income from salaries ₹ 12,00,000 (after standard deduction of Rs. 40,000) and Section 80C Investments of ₹ 1,50,000, Let us calculate the tax liability of Mr.X
Income Chargeable to tax is ₹ 12,00,000 – ₹ 1,50,000 = ₹ 10,50,000
| Upto ₹ 2,50,000 | Nil |
| ₹ 2,50,001 – ₹ 5,00,000 | 5%*₹ 2,50,000 = ₹12,500 |
| ₹ 5,00,001 – ₹ 10,00,000 | 20% * ₹ 5,00,000 = ₹ 1,00,000 |
| Above ₹ 10,00,000 | 30% * ₹ 50,000 = ₹ 15,000 |
| Total Tax liability | ₹ 1,27,500 |
| Health and Education Cess @ 4% | ₹ 5,100 |
| Total Tax liability | ₹1,32,600 |