Budget 2019 – New Income Tax Slabs and Rates for Individuals 2019-20

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Budget 2019 – Under New Income Tax Slabs and Rates, people with earning upto ₹5 lakh per annum , need not to pay any tax. However, Income Tax Slabs remain unchanged.

Announcing the Union Budget 2019, Fin Minister Piyush Goyal proposed full tax rebate for individual tax payers earning up to ₹ 5 Lakh. Individuals with a gross income of ₹ 6.5 lakh may need not to pay any tax if they make an investment up to ₹1.5 Lakh in provident fund or other prescribed equities under Section 80C. This will provide tax saving upto ₹12,500/- for all taxpayers in this slab.

Standard deduction limit also increased from ₹40,000/- to ₹50,000/-. In Budget 2018, Jaitely introduced a standard deduction of ₹40,000/- for salaried class.

Goyal also announced that no tax will be levied on interest income upto ₹40,000/- from post office, banks.

New Income Tax Slabs and Rates FY 2019-20 for Individuals & HUFs (age less than 60 years)

Income Limit Tax Rate Health & Education Cess (on amount of tax computed)
1 Upto ₹ 2,50,000/- NIL NIL
2 ₹ 2,50,001 to ₹ 5,00,000/- 5% of total income exceeding ₹2.5 lakh 4%
3 ₹ 5,00,001 to ₹ 10,00,000/- ₹ 12,500+20% of total income exceeding ₹ 5 lakh 4%
4 Above ₹ 10,00,000/- ₹ 1,12,500+30% of total income exceeding ₹ 10 Lakh

 Surcharge :

10% –  Where total Income is more than 50 lakh and less than 1 crore.

15% – If total income exceeds 1 crore

New Income Tax Slabs and Rates FY 2019-20 for Non Resident Indians (NRIs)

Income Limit Tax Rate Health & Education Cess (on amount of tax computed)
1 Upto ₹ 2,50,000/- NIL NIL
2 ₹ 2,50,001 to ₹ 5,00,000/- 5% of the amount by which total income exceeding ₹2.5 lakh 4%
3 ₹ 5,00,001 to ₹ 10,00,000/- ₹ 12,500+20% of the amount by which total income exceeding ₹ 5 lakh 4%
4 Above ₹ 10,00,000/- ₹ 1,12,500+30% of the amount by which total income exceeding ₹ 10 Lakh 4%

 Surcharge :

10% –  Where total Income is more than 50 lakh and less than 1 crore.

15% – If total income exceeds 1 crore

Income Tax Slabs, Rates for Senior Citizens (Age 60 years or more but less than 80 years) FY 2019-20

Income Limit Tax Rate Health & Education Cess (on amount of tax computed)
1 Upto ₹ 3,00,000/- NIL NIL
2 ₹ 3,00,001 to ₹ 5,00,000/- 5% of the amount by which total income exceeding ₹3 lakh 4%
3 ₹ 5,00,001 to ₹ 10,00,000/- ₹ 10,000+20% of the amount by which total income exceeding ₹ 5 lakh 4%
4 Above ₹ 10,00,000/- ₹ 1,10,000+30% of the amount by which total income exceeding ₹ 10 Lakh 4%

 Surcharge :

10% –  Where total Income is more than 50 lakh and less than 1 crore.

15% – If total income exceeds 1 crore

Income Tax Slabs, Rates for Super Senior Citizens (Age 80 years or more) FY 2019-20

Income Limit Tax Rate Health & Education Cess (on amount of tax computed)
1 Upto ₹ 5,00,000/- NIL NIL
2 ₹ 5,00,001 to ₹ 10,00,000/- 20% of the amount by which total income exceeds ₹ 5 lakh 4%
3 Above ₹ 10,00,000/- ₹ 1,00,000+30% of the amount by which total income exceeding ₹ 10 Lakh 4%

 Surcharge :

10% –  Where total Income is more than 50 lakh and less than 1 crore.

15% – If total income exceeds 1 crore

Income Tax Slabs, Rates for Corporate FY 2019-20

Tax Payer Status Tax Rate
1 Local Entity/Authorities 30%
2* Domestic Entity/ Companies 30% / 25%
3 Foreign Company 40%
*Tax rate is 25 percent if gross receipts of the domestic entity/companies for previous year does not exceed ₹ 250 crore.

 The above tax rates for corporate are exclusive of surcharge and cess.

Income Tax Slabs for Co-operatives Societies for FY 2019-20

Income Tax Rate
1 Up to ₹ 10,000/- 10%
2 ₹ 10,000- ₹ 20,000/- 20%
3 Above ₹ 20,000/- 30%

 Surcharge for Corporate and Co-operative societies

Tax Payer Status Surcharge Rate
₹ 50 Lakh – ₹ 1 Cr ₹ 1 Cr – ₹ 10 cr More than ₹ 10 cr
Local Entities/ Authorities NIL 12% 15%
Domestic Entity / Companies NIL 7% 12%
Foreign Company NIL 2% 5%
Co-operative societies NIL 12% 12%

 Other Important highlight of Interim Budget 2019 for Tax Payers

  • People with annual income up to ₹ 5 Lakh get full tax rebate.
  • Individuals with income up to ₹ 6.5 lakh need not to pay any tax if they make investments in approved instrument sunder section 80C.
  • More than ₹ 23,000 crore tax relief to 3 crore middle class taxpayers.
  • Standard Tax deduction limit for salaried people increase from ₹ 40,000/- to ₹ 50,000/-
  • No TDS on interest income up to ₹40,000/- from post office, banks.
  • Gratuity ceiling increased from ₹ 10 lakh to ₹ 20 lakh.
  • Capital Gains Exemption under Section 54 to be available on two house properties.
  • TDS threshold for tax deduction on rent increased from ₹ 1.8 lakh to ₹ 2.4 lakh
  • Tax Exempted on notional rent on a second self occupied house.

It must be noted that Tax Exemption up to ₹ 5 Lakh is in the form of Tax rebate under section 87A. Tax liability still arises if taxable income exceeds ₹ 5 Lakh after deducting available deductions. We will discuss it in details in our next article.

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