INCOME TAX SLABS & RATES : A.Y 2020-21 [F.Y. 2019-20]

Under existing rules of the Income Tax Act, 1961, resident Indian , non-resident Indians (NRIs) , HUF and AOP are taxed according to the same tax slabs and rates. The following are the IT slabs and slab rates for FY 2019-2020.

1. In case of an Individual (resident or non-resident) or HUF or Association of Person or Body of Individual or any other artificial juridical person

Assessment Year 2020-21

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%

Less: Rebate under Section 87A [see Note]
Add: Surcharge and Health & Education Cess [see Note]

2. In case of a resident senior citizen (who is 60 years or more at any time during the previous year but less than 80 years on the last day of the previous year)

Assessment Year 2020-21

Taxable Income Tax Rate
Up to Rs. 3,00,000 Nil
Rs. 3,00,000 to Rs 5,00,000 5%
Rs. 5,00,000 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

Less: Rebate under Section 87A [see Note]
Add: Surcharge and Health & Education Cess [see Note]

3. In case of a resident super senior citizen (who is 80 years or more at any time during the previous year)

Assessment Year 2020-21

Taxable Income Tax Rate
Up to Rs. 5,00,000 Nil
Rs. 5,00,000 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

Add: Surcharge and Health & Education Cess [see Note]

Note:

Assessment Year 2020-21

a) Surcharge:
Surcharge is levied on the amount of income-tax at following rates if the total income of an assessee exceeds specified limits:

Surcharge: - 10% of income tax where total income exceeds Rs. 50 lakh doesn’t exceed Rs 1 Crore.
Surcharge: - 15% of income tax where total income exceeds Rs. 1 Crore doesn’t exceed Rs 2 Crore.
Surcharge: - 25% of income tax where total income exceeds Rs. 2 Crore doesn’t exceed Rs 5 Crore.
Surcharge: - 37% of income tax where total income exceeds Rs. 5 Crore

b) Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of 4% of such income-tax and surcharge.

c) Rebate under Section 87A: The rebate is available to a resident individual if his total income does not exceed Rs. 5,00,000. The amount of rebate shall be 100% of income-tax or Rs. 12,500, whichever is less.

4. Partnership Firm
For the Assessment Year 2019-20 & 2020-21, a partnership firm (including LLP) is taxable at 30%.

Add:
a) Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees.

b) Health and Education Cess: 4% of income tax plus surcharge.

5. Local Authority
For the Assessment Year 2020-21, a local authority is taxable at 30%.

Add:
a) Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees.

b) Health and Education Cess: 4% of income tax plus surcharge.

6. Domestic Company
Income-tax rates applicable in case of companies for Assessment Year 2020-21 are as follows:

Particulars Tax Rate
Total turnover or gross receipts during the previous year 2017-18 up to 400cr 25%
Gross turnover exceeding 400cr in FY 2017-18 30%
Where company opted section 115BA 25%
Where company opted section 115BAA 22%
Where company opted section 115BAB 15%

Add:
Surcharge:-

Company Net income is between Rs. 1Cr. – 10 Cr. Net income exceeds Rs. 10Cr.
Domestic company 7% 12%

b) Health and Education Cess: 4% of income tax plus surcharge.

c) Surcharge is an case of under section 115BAA & section 115BAB shall be 10% of total income.

What are these new section and what they covered?

  • Section 115BAA and Section 115BAB are newly introduced sections covering the changes in corporate tax rates proposed by the Taxation Bill, 2019 to the ‘Ordinance’ and Finance (No.2) Act 2019.
  • Section 115BAA allows all domestic companies the option to switch to a tax rate of 22% (plus surcharge and cess) subject to certain conditions. The option can be exercise any time, starting with FY 2019-20; however, once it is exercised, the company cannot go back to the previous tax rates and conditions
  • Section 115BAB of the IT Act provides for lower tax rate of 15 percent (plus applicable surcharge and cess) in respect of newly formed manufacturing companies subject to certain specified conditions.
    A company will be entitled to the benefit of low corporate tax rate if it satisfies the following conditions: The company has been set up and registered on or after 1 October 2019 and has commenced manufacturing on or before 31 March 2023 The option can be exercise any time, starting with FY 2019-20; however, once it is exercised, the company cannot go back to the previous tax rates and conditions.

7. Foreign Company
Assessment Year 2020-21

Nature of Income Tax Rate
Royalty received from Government or an Indian concern in pursuance of an agreement made with the Indian concern after March 31, 1961, but before April 1, 1976, or fees for rendering technical services in pursuance of an agreement made after February 29, 1964 but before April 1, 1976 and where such agreement has, in either case, been approved by the Central Government 50%
Any other income 40%

Add:
a) Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 2% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 5% of such tax, where total income exceeds ten crore rupees.

b) Health and Education Cess: 4% of income tax plus surcharge.

8. Co-operative Society
Assessment Year 2019-20 and Assessment Year 2020-21

Taxable Income Tax Rate
Up to Rs. 10,000 10%
Rs. 10,000 to Rs. 20,000 20%
Above Rs. 20,000 30%

Add:
Surcharge:- 12% of tax where total income exceeds Rs. 1 crore.
Health and Education cess: 4% of income tax plus surcharge.