Income Tax Slab in India for FY 2018-19 & AY 2019-20

Income Tax Slab

The income tax slab defines the limit beyond which a specific tax is rate is applied on the income. It also encompasses the deductions which are made according to the applied rate.

The Income Tax Act, 1961, upholds provisions for determining the tax liability, taxable income etc. These provisions are extended uniformly for the entire nation.  Income tax slabs are applicable on the basis of the factors mentioned below:

  • Income of assessee
  • Residential status of the assessee
  • Assessment year
  • Rate of tax
  • Charge of income tax
  • Maximum amount or threshold limit till income is not chargeable/taxable
  • Gross income

The income tax slab stands applicable to:

  • Any resident individual with a regular source of income
  • A Hindu Undivided Family (HUF)
  • A company
  • A firm
  • An Association of Persons (AOP) or a Body of Individuals (BOI) whether incorporated or not
  • Any local authority

Income Tax Slab for the Financial Year 2019-2020

According to the Union budget of 2018, the income tax will be assessed in different categories as per the below slabs.

Income Tax Slab for Resident Individuals & Non-Resident Indians

Income Threshold

Tax rate applicable

Up to ₹ 2,50,000

NIL

₹ 2,50,000 to ₹ 5,00,000

5%

₹ 5,00,000 to ₹ 10,00,000

20%

Over ₹ 10,00,000

30%

Additional Components

  1. Surcharge: The surcharge is applied at 10% of the income tax if the income exceeds ₹ 50 lakhs but is less than ₹ 1 crore. However, if income exceeds ₹ 1 crore, then a 15% surcharge is applied on income tax on the amount which is exceeding ₹ 1 crore.
  2. Health and Education Cess: “Health and Education Cess” will replace “Education Cess” and “Secondary and Higher Education Cess” at 4% rate on the amount of computed tax which is inclusive of surcharge.
  3. If you have a net taxable income up to Rs. 5 lacks, then according to the interim budget 2019 you are eligible for a full tax rebate.

Hindu Undivided Families (HUFs)

Income Threshold

Tax rate applicable

Up to ₹ 2,50,000

Nil

₹ 2,50,000 to ₹ 5,00,000

5%

₹ 5,00,000 to ₹ 10,00,000

20%

Over ₹ 10,00,000

30%

Additional Components

  1. Surcharge: The surcharge is applied at 10% of the income tax if the income exceeds ₹ 50 lakhs but is less than ₹ 1 crore. However, if income exceeds ₹ 1 crore, then 15% surcharge is applied on income tax on the amount which is exceeding ₹ 1 crore.
  2. Health and Education Cess: “Health and Education Cess” will replace “Education Cess” and “Secondary and Higher Education Cess” at 4% rate on the amount of computed tax which is inclusive of surcharge.

Associations of Persons, Bodies of Individuals and Other Artificial Judicial Persons

Income Threshold

Tax rate applicable

Up to ₹ 2,50,000

Nil

₹ 2,50,000 to ₹ 5,00,000

5%

₹ 5,00,000 to ₹ 10,00,000

20%

Over ₹ 10,00,000

30%

Additional Components

  1. Surcharge: The surcharge is applied at 10% of the income tax if the income exceeds ₹ 50 lakhs but is less than ₹ 1 crore. However, if income exceeds ₹ 1 crore, then 15% surcharge is applied on income tax on the amount which is exceeding ₹ 1 crore.
  2. Education Cess: It will be charged an extra 2% rate on the income tax amount plus the applicable surcharge.
  3. Secondary & Higher Education Cess: It will be charged an extra 1% on the income tax amount plus a surcharge.

Senior Citizens

Income Threshold

Tax rate applicable

Up to ₹ 3,00,000

Nil

₹ 3,00,000 to ₹ 5,00,000

5%

₹ 5,00,000 to ₹ 10,00,000

20%

Over ₹ 10,00,000

30%

Additional Components

  1. Surcharge: The surcharge is applied at 10 % of the income tax if the income exceeds ₹ 50 lakhs but is less than ₹ 1 crore. However, if income exceeds ₹ 1 crore, then 15% surcharge is applied on income tax on the amount which is exceeding ₹ 1 crore.
  2. Health and Education Cess: “Health and Education Cess” will replace “Education Cess” and “Secondary and Higher Education Cess” at 4% rate on the amount of computed tax which is inclusive of surcharge.

Super Senior Citizens

Income Threshold

Tax rate applicable

Up to ₹ 5,00,000

No tax

₹ 5,00,000 to ₹ 10,00,000

20%

₹ 10,00,000

30%

Additional Components

  1. Surcharge: The surcharge is applied at 10% of the income tax if the income exceeds ₹ 50 lakhs but is less than ₹ 1 crore. However, if income exceeds ₹ 1 crore, then 15% surcharge is applied on income tax on the amount which is exceeding ₹ 1 crore.
  2. Health and Education Cess: “Health and Education Cess” will replace “Education Cess” and “Secondary and Higher Education Cess” at 4% rate on the amount of computed tax which is inclusive of surcharge.

Partnership Firms

For any Partnership Firms & Limited Liability Partnerships (LLP) the applicable tax rate is flat 30%.

Additional Components

  1. Surcharge: The surcharge is applied at 12 % of the income tax if the income exceeds ₹ 1 crore.
  2. Health and Education Cess: “Health and Education Cess” will replace “Education Cess” and “Secondary and Higher Education Cess” at 4% rate on the amount of computed tax which is inclusive of surcharge.

Local Entity / Authorities

For local entities and authorities, the applicable tax rate is flat 30%.

Additional Components

  1. Surcharge: The surcharge is applied at 12 % of the income tax if the income exceeds ₹ 1 crore.
  2. Health and Education Cess: “Health and Education Cess” will replace “Education Cess” and “Secondary and Higher Education Cess” at 4% rate on the amount of computed tax which is inclusive of surcharge.

Domestic Entity Companies

For Domestic companies, the applicable tax rate is flat 30%. The company is liable to pay taxes at 25% if the gross receipt of the company does not go beyond ₹ 250 crores in the previous year.

Additional components:

  1. Surcharge: A surcharge of 7% is applicable over the income tax amount if the income of the company is between ₹ 1 crore and ₹ 10 crores. A surcharge of 12% rate is charged is the amount exceeds ₹ 10 crores.
  2. Health and Education Cess: “Health and Education Cess” will replace “Education Cess” and “Secondary and Higher Education Cess” at 4% rate on the amount of computed tax which is inclusive of surcharge.

Foreign Entity / Companies

Nature of Income

Tax rate

If any Foreign Company operating in India receives income as royalty compensated by the Government of India against the agreements executed with the Indian concern (after 31st March 1961, and prior to 1st April  1976)

50%

If any Foreign Company operating in India receives income as fees for any technical services provided as per the agreements executed with an Indian concern (after 29th February 1964, and prior to 1st April  1976)

50%

Any other additional income earned by the Foreign Company operating in India

40%

Additional Components

Surcharge: A surcharge of 2% is applicable to the income tax amount if the income of the company is between ₹ 1 crore and ₹ 10 crores. A surcharge at 5% rate is charged is the amount exceeds ₹ 10 crores

Health and Education Cess: “Health and Education Cess” will replace “Education Cess” and “Secondary and Higher Education Cess” at 4% rate on the amount of computed tax which is inclusive of surcharge.

Co-operative Societies

Urban / Semi-Urban/ Rural excluding Self Help Group (SHG) and Agricultural Societies.

Income Threshold

Tax rate applicable

Up to ₹ 10,000

10%

₹ 10,000 to  ₹ 20,000

20%

Over  ₹ 20,000

30%

Additional Components:

  1. Surcharge: The surcharge is applied at 12 % of the income tax if the income exceeds ₹ 1 crore.
  2. Health and Education Cess: “Health and Education Cess” will replace “Education Cess” and “Secondary and Higher Education Cess” at 4% rate on the amount of computed tax which is inclusive of surcharge.

Income tax slabs comparison for financial year 18-19 Vs financial year 17-18

Income Tax Slab for individuals less than 60 years of age and HUF

Income range per annum

Tax Rate FY 2019-20, AY 2020-21

Tax Rate FY 2018-19, AY 2019-20

Up to Rs. 2.5 lakhs

No Tax

No Tax

Above Rs. 2.5 lakhs to Rs. 5 lakhs

5% + 4% cess

5% + 4% cess

Above Rs. 5 lakhs to Rs. 10 lakhs

20% + 4% cess

20% + 4% cess

Above Rs. 10 lakhs to Rs. 50 lakhs

30% + 4% cess

30% + 4% cess

Above Rs. 50 lakhs to Rs. 1 crore

30% + 10% surcharge + 4% cess

30% + 10% surcharge + 4% cess

Above Rs. 1 crore

30% +15% surcharge + 4% cess

30% +15% surcharge + 4% cess

Rebate under section 87(A)

100% tax rebate subject to maximum of Rs. 12,500 available to resident individual whose net taxable income does not exceed Rs. 5 lakhs

100% tax rebate subject to maximum of Rs. 2,500 available to resident individual whose net taxable income does not exceed Rs. 3.5 lakhs

Major Changes made in Income Tax Slabs for financial year 2018-2019

  • Tax Rebate for Middle Class:  As per section 87A of the Income Tax Act, 1961, those individuals which have a net taxable income up to Rs.5 lakh has been given full tax rebate.
  • Standard Deduction Limit: It has been increased from Rs 40,000 to Rs.50,000 for salaried employees.
  • TDS Threshold on Rental Income: It has been increased from Rs.1.8 lakh to Rs. 2.4 lakh. There has also been an increase from 1 year to 2 years for income tax exemption from notional rent for unsold properties.
  • TDS Limit on Interest Income: No TDS deduction on interest income earned from banks or post office deposits up to Rs. 40,000 annually.

Income Tax Slabs on Dividend

Based on the type of entity which is declaring the dividend income,  dividend income is taxed too.

Source of Dividend

Tax Rate for Individuals/HUFs

Income Tax Section

-if aggregate dividend income received during the year is less than Rs. 10 lakh

Nil

Section 10(34)

-if aggregate dividend income received during the year is more than Rs. 10 lakh

10%

Section 115BBDA

Income Tax Slab For NRI

Taxable Income

Tax Rate

Up to Rs. 2,50,000

Nil

Rs. 2,50,000 to Rs 5,00,000

5%

Rs. 5,00,000 to Rs. 10,00,000

20%

Above Rs. 10,00,000

30%

Health and Education Cess at 4% rate on the amount of computed tax which is inclusive of surcharge.

Income Tax Slab for Expats

Taxable Income

Tax Rate

Up to Rs. 2,50,000

Nil

Rs. 2,50,000 to Rs 5,00,000

5%

Rs. 5,00,000 to Rs. 10,00,000

20%

Above Rs. 10,00,000

30%

Education cess and Surcharge (if any) payable

3%

Income Tax Slab for Freelancers

The income tax slab rates as same for all individuals. For Freelancers, the tax slab and rates are as follows :

Income Threshold

Tax rate applicable

Up to ₹ 2,50,000

NIL

₹ 2,50,000 to ₹ 5,00,000

5%

₹ 5,00,000 to ₹ 10,00,000

20%

Over ₹ 10,00,000

30%

Additional Components

  1. Surcharge: The surcharge is applied at 10 % of the income tax if the income exceeds ₹ 50 lakhs but is less than ₹ 1 crore. However, if income exceeds ₹ 1 crore, then 15% surcharge is applied on income tax on the amount which is exceeding ₹ 1 crore.
  2. Health and Education Cess: “Health and Education Cess” will replace “Education Cess” and “Secondary and Higher Education Cess” at 4% rate on the amount of computed tax which is inclusive of surcharge.

Income Tax Slab For Doctors

Income Threshold

Tax rate applicable

Up to ₹ 2,50,000

NIL

₹ 2,50,000 to ₹ 5,00,000

5%

₹ 5,00,000 to ₹ 10,00,000

20%

Over ₹ 10,00,000

30%

Additional Components

  1. Surcharge: The surcharge is applied at 10% of the income tax if the income exceeds ₹ 50 lakhs but is less than ₹ 1 crore. However, if income exceeds ₹ 1 crore, then 15% surcharge is applied on income tax on the amount which is exceeding ₹ 1 crore.
  2. Health and Education Cess: “Health and Education Cess” will replace “Education Cess” and “Secondary and Higher Education Cess” at 4% rate on the amount of computed tax which is inclusive of surcharge.

Income Tax slab for Pensioners

Income Tax Slabs

Tax Rate

Health and Education Cess

Income up to Rs 3,00,000*

No tax

 

Income from Rs 3,00,000 – Rs 5,00,000

5%

4% of Income Tax

Income from Rs 5,00,000 – 10,00,000

20%

4% of Income Tax

Income more than Rs 10,00,000

30%

4% of Income Tax

  1. Surcharge: The surcharge is applied at 10 % of the income tax if the income exceeds ₹ 50 lakhs but is less than ₹ 1 crore. However, if income exceeds ₹ 1 crore, then 15% surcharge is applied on income tax on the amount which is exceeding ₹ 1 crore.

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