New Income Tax Slab and Tax Rebate/Credit under section 87A

New Income Tax Slab and Tax Rebate/Credit under section 87A

Interim Budget 2019 which came in February 2019 had given lots of tax sops thus there was no such expectation related to relaxation of income tax slab, tax rates or any more deduction from Nirmala Sitharaman maiden Budget.

Below are the Income Tax Slab, Income Tax Rates and Tax-Credit applicable for Assessment Year 2020-21 i.e. Financial Year 2019-20.

Income Tax Slab for AY 2020-21 i.e. FY 2019-20

a). The income tax slabs for the individuals ageing below 60 years, Hindu Undivided Family, Association of Persons, and Body of Individuals whether incorporated or not, are as follows:

ParticularsTax RateSurchargeCess @ 4%Total Effective Tax Rate
Up to ₹ 2.50 lakhsNILNILNILNIL
₹ 2.50 lakhs to ₹ 5 lakhs5%0.200% (due to rebate)
₹ 5 lakhs to ₹ 10 lakhs20%0.8020.80%
₹ 10 lakhs to ₹ 50 lakhs30%1.2031.20%
₹ 50 lakhs to ₹ 1 crore30%31.3234.32%
₹ 1 crore to ₹ 2 crore30%4.51.3835.88%
₹ 2 crore to ₹ 5 crore30%7.51.5039.00%
Above ₹ 5 crores30%11.11.64442.74%

b). The income tax slabs for the senior citizens ageing 60 years to 79 years are as follows:

ParticularsTax RateSurchargeCess @ 4%Total Effective Tax Rate
Up to ₹ 3 lakhsNILNILNILNIL
₹ 3 lakhs to ₹ 5 lakhs5%0.200% (due to rebate)
₹ 5 lakhs to ₹ 10 lakhs20%0.8020.80%
₹ 10 lakhs to ₹ 50 lakhs30%1.2031.20%
₹ 50 lakhs to ₹ 1 crore30%31.3234.32%
₹ 1 crore to ₹ 2 crore30%4.51.3835.88%
₹ 2 crore to ₹ 5 crore30%7.51.5039.00%
Above ₹ 5 crores30%11.11.64442.74%

c). The income tax slabs for the super senior citizens ageing 80 years and above are as follows:

ParticularsTax RateSurchargeCess @ 4%Total Effective Tax Rate
Up to ₹ 5 lakhsNILNILNILNIL
₹ 5 lakhs to ₹ 10 lakhs20%0.8020.80%
₹ 10 lakhs to ₹ 50 lakhs30%1.2031.20%
₹ 50 lakhs to ₹ 1 crore30%31.3234.32%
₹ 1 crore to ₹ 2 crore30%4.51.3835.88%
₹ 2 crore to ₹ 5 crore30%7.51.5039.00%
Above ₹ 5 crores30%11.11.64442.74%

Surcharge

Surcharge applicable on the above income tax-slabs are as follows:

  • No Surcharge for the income up to ₹ 50 lakhs.
  • Surcharge from ₹ 50 lakhs to ₹ 1 crore is 10% of the Tax.
  • Surcharge from ₹ 1 crore to ₹ 2 crores is 15% of the Tax.
  • Surcharge from ₹ 2 crore to ₹ 5 crores is 25% of the Tax.
  • Surcharge for the income above ₹ 5 crore is 37% of the Tax.

Read Additional Home Loan Tax Deduction in Budget 2019 under Section 80EEA

Tax-Rebate under Section 87A for AY 2020-21 i.e. FY 2019-20

Tax-Rebate under section 87A is available for the income up to ₹ 5 lakhs (₹ 3.50 lakhs earlier). Following conditions shall be met for claiming the tax rebate under section 87A.

  1. The assessee must be an Indian Resident.
  2. The total income after deduction under section 80 shall not exceed ₹ 5 lakhs.
  3. The total tax-rebate is restricted to ₹ 12,500. That means, if the total income tax liability of the assessee comes up to ₹ 12,500 or lower then no tax shall be payable.
  4. This tax rebate under section 87A is applied to the total tax before adding the Health & Education Cess of 4%.

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