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Here are the latest income tax slabs and rates

ET Online|
Updated: Jul 05, 2019, 06.44 PM IST
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These are the latest income tax slabs applicable to individuals.

Highlights

  • Budget 2018 only increased total cess on income tax to 4% but made no change in the existing tax slabs and income tax rates.
  • The basic exemption limit for an individual depends on his/her age as well as his/her residential status.
The maiden budget of Nirmala Sitharaman saw the introduction of new surcharges for the super rich. As per EY analysis, the effective tax rate for the super rich will now be more than 40 per cent once the Budget proposals are passed by the Parliament. These changes will be effective from April 1, 2019.

As per the Budget 2019 proposals, no changes in the income tax slabs and rates have been proposed. A rebate of Rs 12,500 will be available for taxpayers with taxable income up to Rs 5 lakh. This rebate will be available under Section 87A of the Income Tax Act. Also, standard deduction for FY 2019-20 would be Rs 50,000.

However, surchrages would be levied as follows, once the budget proposals are passed by the Parliamnet for FY 2019-20:
Taxable Income Surcharge (%)
Income above Rs 50 lakh but below Rs 1 crore 10
Income above Rs 1 crore but below Rs 2 crore 15
Income above Rs 2 crore but below 5 crore 25
Income above Rs 5 crore 37

Given below are the latest income tax (I-T) slabs applicable for financial year 2018-19 (assessment year 2019-20). These will be applicable for FY 2019-20 as well once the budget proposals are passed by the Parliament.

The basic exemption limit for an individual depends on his/her age as well as his/her residential status. According to age, resident individual taxpayers are divided into three categories:
1. Resident individuals below the age of 60 years
2. Resident senior citizens of age between 60 years and above but below 80 years
3. Resident super senior citizens of above 80 years of age

Given below are the tables for latest income tax slabs

Income tax slabs for resident Individual below 60 years of age
Taxable income slabsIncome tax rates and cess
Up to Rs 2.5 lakhNil
Rs 2,50,001 to Rs 5,00,0005% of (Total income minus Rs 2,50,000) + 4% cess
Rs 5,00,001 to Rs 10,00,000Rs 12,500 + 20% of (Total income minus Rs 5,00,000) + 4% cess
Rs 10,00,001 and aboveRs 1,12,500 + 30% of (Total income minus Rs 10,00,000) + 4% cess

Income tax slabs for resident individual between 60 and 80 years of age (Senior Citizen)
Taxable income slabsIncome tax rates and cess
Up to Rs 3 lakhNil
Rs 3,00,001 to Rs 5,00,0005% of (Total income minus Rs 3,00,000) + 4% cess
Rs 5,00,001 to Rs 10,00,000Rs 10,000 + 20% of (Total income minus Rs 5,00,000) + 4% cess
Rs 10,00,001 and aboveRs 1,10,000 + 30% of (Total income minus Rs 10,00,000) + 4% cess

Income tax slabs for resident individual above 80 years of age (Super Senior Citizen)
Taxable income slabsIncome tax rates and cess
Up to Rs 5 lakhNil
Rs 5,00,001 to Rs 10,00,00020% of (Total income minus Rs 5,00,000) + 4% cess
Rs 10,00,001 and aboveRs 1,00,000 + 30% of (Total income minus Rs 10,00,000) + 4% cess

For Non-resident individuals (NRI), the basic exemption limit is of Rs 2.5 lakh in a financial year irrespective of their age.

If the net income exceeds Rs 50 lakh but below Rs 1 crore, a surcharge of 10% is levied on the income tax payable before levy of cess at 4%. If the net income exceeds Rs 1 crore, then a surcharge of 15% is levied.

Last year's budget increased cess on income tax to 4 per cent from 3 percent earlier across the board for taxpayers. Due to the hike in cess, the tax liability for the highest slab (assuming an income of Rs 15 lakh) has increased by Rs 2,625. In the middle income tax slab, the tax outgo increases by Rs 1,125, and there is a nominal increase in the tax liability of Rs 125 for lowest income tax slab.

Here's how much your income tax liability will be as per the proposed announcements:

Post-Budget-Tax1

Post-Budget-Tax2

Post-Budget-Tax3

These proposals will come into effect from the assessment year 2019-20. Assessment year is the year that immediately follows the financial year.

Click here to use our Income Tax Calculator

As per the current income tax slabs, taxation of income of resident individuals below 60 years is as follows: Income up to Rs 2.5 lakh is exempt from tax, 5 per cent tax on income between Rs 250,001 to Rs 5 lakh; 20 per cent tax on income between Rs 500,001 and Rs 10 lakh; and 30 per cent tax on income above Rs 10 lakh.

For senior citizens (aged 60 years or above but less than 80 years), income up to Rs 3 lakh is exempt from tax. Income from Rs 300,001 to Rs 5 lakh is taxed at 5 per cent, from Rs 500,001 to Rs 10 lakh at 20 per cent and above Rs 10 lakh at 30 per cent.

For super senior citizens, aged 80 years and above, income up to Rs 5 lakh is exempt from tax. Income from Rs 500,001 to Rs 10 lakh is taxed at 20 per cent and above Rs 10 lakh is taxed at 30 per cent.

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After taking the deductions under Section 80 (C) to 80 (U), the tax is payable after adding the cess and surcharge, if applicable.

The education cess of 2% and secondary cess of 1% are calculated on the amount of tax payable separately. Both the cess are then added to the tax payable to arrive at the Gross tax payable amount.

The surcharge is levied @ 15% on the amount of income tax where net income exceeds Rs 1 crore and at 10 per cent where net income exceeds Rs 50 lakh and below Rs 1 crore. In the case where the surcharge is levied, the cess will be levied on the tax amount plus surcharge.

A resident individual can also avail rebate under Section 87(A) whose net income is equal to or less than Rs 3.5 lakh. The amount of rebate under this section is 100% of the income tax or Rs 2,500 whichever is less. It is deductible before calculating the cess.
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