On 1st February 2020, The Finance Minister of India Mrs Nirmala Sitharaman has presented the interim budget. In this budget the taxpayers who have a taxable income of Rs.5,00,000 the rebate of Rs. 12,500 was announced. To reduce total tax liability by individuals, the union budget has proposed a new tax slab by decreasing income tax rates and changes the income tax slabs.
According to the finance minister, the new tax rule offers a lower tax rate and simultaneously remove tax deductions that will result in lower outgo. Now the taxpayer has been given with an option to choose from new tax rule with a lower income tax rate but no tax deduction or existing income tax rule which allows availing existing income tax deductions.
Individual taxpayers are divided in to three categories:
Income Tax Slab (New Regime) – Optional
| Total Annual Income | Tax Rate |
|---|---|
| Up to Rs 2.5 Lakh | Nil |
| From 2,50,001 to 5,00,000 | 5.00% |
| Rs 5,00,001 to 7,50,001 | 10.00% |
| Rs 7,50,0001 to 10,00,000 | 15.00% |
| Rs 10,00,001 to 12,50,000 | 20.00% |
| Rs 12, 50,001 to 15,00,000 | 25.00% |
| Above Rs 15,00,000 | 30.00% |
Income Tax Slabs and Rates for Individuals Below 60 Years of Age
| Total Annual Income | Tax Rate |
|---|---|
| Up to Rs 2,50,000 | Nil |
| Rs 2,50,001 to Rs 5,00,000 | 5% of the total income that is more than Rs.2.5 lakh + 4% cess |
| Rs 5,00,001 to Rs 10,00,000 | 20% of the total income that is more than Rs.5 lakh + Rs.12,500 + 4% cess |
| Rs 10,00,001 and Above | 30% of the total income that is more than Rs.10 lakh + Rs.1,12,500 + 4% cess |
Income Tax Slabs and Rates for Senior Citizens (Age Between 60 – 80 Years)
| Total Annual Income | Tax Rate |
|---|---|
| Up to Rs 3 lakh | Nil |
| Rs 3,00,001 to Rs 5,00,000 | 5% of the total income that is more than Rs.3 lakh + 4% cess |
| Rs 5,00,001 to Rs 10,00,000 | 20% of the total income that is more than Rs.5 lakh + Rs.10,500 + 4% cess |
| Rs 10,00,001 and Above | 30% of the total income that is more than Rs.10 lakh + Rs.1,10,000 + 4% cess |
Income Tax Slabs and Rates for Super Senior Citizens (Age 80 Years and Above)
| Total Annual Income | Tax Rate |
|---|---|
| Up to Rs 5 lakh | Nil |
| Rs 5,00,001 to Rs 10,00,000 | 20% of the total income that is more than Rs.5 lakh + 4% cess |
| Rs 10,00,001 and Above | 30% of the total income that is more than Rs.10 lakh + Rs.1,00,000 + 4% cess |
Health and education cess at the rate of 4 % plus surcharge are levied on the income tax wherever applicable. Surcharge on income tax will also be added as per the income tax slab applicable to the individual.
As per the income slab surcharge on income tax will also be added to the individual as below :
10% for income more than Rs 50 lakh and up to Rs 1 crore, 15% for income more than Rs 1 crore and up to Rs 2 crore, 25% for income more than Rs 2 crore and up to Rs 5 crore and 37% for income more than Rs 5 crore.
source: incometaxindia.gov.in
For details visit official website of Income Tax Department Government of India i.e. www.incometaxofindia.gov.in Or Click Here
