Income Tax Rates for Individuals

Direct tax is also known as Income Tax. Assessee is liable to pay Income Tax on profits and gross salary. Every year, finance ministry announces Fiscal year budget in February and notifies the Tax Slabs and Direct tax related notifications.

Slab basis Individual income tax rates for FY 19-20 and FY 20-21:

Income up to RS 2,50,000 – Nil Tax.

Between RS.2,50,000 – Rs.5,00,000 – 5%,

Between RS.5,00,000 – Rs.10,00,000 – 20%.

Above Rs.10,00,000 – 30%.

Additional components

1. Surcharge: In case income is more than ₹ 50 lakhs and less than ₹ 1 crore, the surcharge is applicable at a rate of 10% of the income tax. For income, more than ₹ 1 crore, a surcharge of 15% is applicable on income tax on the amount exceeding ₹ 1 crore.
2. Health and Education Cess: “Education Cess” and “Secondary and Higher Education Cess” will be replaced by “Health and Education Cess” at the rate of 4%, on the amount of tax computed, inclusive of surcharge.
3. The interim budget 2019 has provisioned to provide a full tax rebate to individuals having a net taxable income (income adjusted after eligible tax deductions) upto Rs 5lakhs. It means that the maximum tax rebate provided under section 87A has been increased from Rs. 2,500 to Rs. 12,500. Individuals having net taxable income upto Rs. 5lakhs can claim the tax rebate under 87A and thus effectively pay zero tax.
4. Assessee can claim marginal relief in surcharge computation

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