Income Slabs and deductions under Income Tax applicable for AY 20-21/FY 19-20


Income Slabs and deductions under Income Tax applicable for AY 20-21/FY 19-20

Firstly I would like to congratulate the CA Fraternity that a CA has presented Interim Budget for the year 2019. It is indeed a proud moment for all the Chartered Accountants.

Hona’ble Finance Minister Mr Piyush Goyal presented Interim Budget 2019 on 1st of Feburary 2019. While the Income Tax Slab have been kept unchanged for AY 2020-21, some interesting changes have been proposed  in the tax structure which will have an impact on the tax liability of Individuals specially middle class people.

I have made summary of Income Slabs, deductions and Allowance under Income Tax applicable for AY 20-21/FY 19-20 based on Interim Budget Presented by our Hon’able Finance minister.

Kindly note that any change of Income Slabs, deductions or Allowance under Income Tax suggested in this article is based on Interim Finance bill proposed by BJP Government and is subject to it’s approval from parliament.

Income Slabs and deductions under Income Tax applicable for AY  20-21/FY 19-20
Income Slabs and deductions under Income Tax applicable for AY 20-21/FY 19-20

Income Slabs and deductions under Income Tax applicable for AY 20-21/FY 19-20

Slab Rates for FY 19-20 or AY 20-21

Slab rates for FY 19-20 or AY 20-21 for General Public or Individuals below 60 years of Age

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Tax Slab for Individuals Tax Rate
Upto 2,50,000 Nil
2,50,000-5,00,000 5%
5,00,000-10,00,000 20%
Over 10,00,000 30%

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Slab Rates for FY 19-20 or AY 20-21 for Senior Citizen who are resident and above 60 and below 80 years of Age

[su_table]

Tax Slab for Individuals Tax Rate
Upto 3,00,000 Nil
3,00,000-5,00,000 5%
5,00,000-10,00,000 20%
Over 10,00,000 30%

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Slab Rates for FY 19-20 or AY 20-21 for Very Senior Citizen who are resident and above 80 years of Age

[su_table]

Tax Slab for Individuals Tax Rate
Upto 5,00,000 Nil
5,00,000-10,00,000 20%
Over 10,00,000 30%

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*Less : Tax rebate maximum upto Rs. 12500 for Total income upto Rs. 5,00,000

Add : Education + Health Cess of 4%

Concept of Rebate U/S 87A

*Let us Understand the Concept of Rebate with a small Example

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Particulars   Situation 1 Situation 2
Income   500000 500100
Computation of Income      
Slab Tax Rate    
0-250000 0% 0 0
250000-500000 5% 12500 12500
500000-500100 20% 0 20
Rebate U/S 87A   -12500 0
Net Tax   0 12520
Add : Cess @ 4%   0 501
Net Tax Liability   0 13021

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It means when total income is upto Rs. 5L, then no tax shall be payable by the assessee. But if total income exceeds Rs. 5L, the same shall be taxed at existing Slab rate.

Income Slabs and deductions under Income Tax applicable for AY 20-21/FY 19-20
Income Slabs and deductions under Income Tax applicable for AY 20-21/FY 19-20

Popular Deductions under Income Tax applicable for AY 20-21/FY 19-20

[su_table]

Section

Sources of Investments

Amount

80C

Rs. 1,50,000 => LIC / PPF / KVP / EPF / SSY / NSC / HOME LOAN PRINCIPAL / SCHOOL FEES/ ELSS/STAMP DUTY

Rs. 1,50,000

80CCD(1B)

Rs. 50,000 => NPS

Rs. 50,000

24

Rs. 2,00,000 => Home loan interest

Rs. 2,00,000

80DD

Rs. 75000/125000 => Exp of disabled dependent

Rs. 75000/125000

80U

Rs. 75000/125000 => own Physical Disability

Rs. 75000/125000

80TTA

Rs. 10,000 = > Interest on Savings Account. [Persons other than Senior citizen / Very senior citizen]

Rs. 10,000

80TTB

Rs. 50,000 = > Interest on Savings Account. and Interest on deposits with Post Offices, Banks, Co-operative bank. Only available to senior citizen & Very senior Citizen

Rs. 50,000

80G

Donation ( Only if paid by cheque/ Bank Mode )

Upto 50% of Donation or 10% Total income. whichever is higher

80GG

Deduction for the rent paid (Not available to Individuals who gets HRA from Employment). Least of the following shall be available :-

1) Rent paid minus 10 percent the adjusted total income.

2) Rs 5,000 per month

3) 25 percent of the adjusted total income

80D

Mediclaim For self, spouse and dependent children ( Only if paid by cheque/ Bank Mode )

Rs. 25000/50000

 

Up to Rs. 25,000 [Rs. 50,000 if person is a senior citizen]

80D

Mediclaim For Parents ( Only if paid by cheque/ Bank Mode )

Rs. 25000/50000

 

Upto Rs. 25,000 shall be allowed [Rs. 50,000 if person is a senior citizen]

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Deductions under Income Tax applicable for AY 20-21/FY 19-20 specially for Salaried Individuals

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16(ia)

Standard Deduction [Rs. 50,000 or the amount of salary, whichever is lower]

Individual – Salaried Employee

16(ii)

Entertainment allowance [actual or at the rate of 1/5th of salary, whichever is less] [limited to Rs. 5,000]

Government employees

16(iii)

Employment tax

Salaried assessees

10(13A)

HRA Exemption

Least of the following is exempt:

a) Actual HRA Received

b) 40% of Salary (50%, if house situated in Mumbai, Calcutta, Delhi or Madras)

c) Rent paid minus 10% of salary

* Salary= Basic + DA (if part of retirement benefit) + Turnover based Commission

Note:

i. Fully Taxable, if HRA is received by an employee who is living in his own house or if he does not pay any rent

ii. It is mandatory for employee to report PAN of the landlord to the employer if rent paid is more than Rs. 1,00,000 [Circular No. 08 /2013 dated 10th October, 2013].

Salaried assessees

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Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. In no event shall I shall be liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information.


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8 Comments

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  1. Useful information for everyone. It is more useful if deduction part may be in comparative table (i.e. existing and proposed)

  2. Extremely useful chart of Income tax Slabs with all updated changes for FY 2019-20 .. Keep up the great work … it helps a lot to lot ….

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