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

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

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%

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

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%

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

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

*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

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

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

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

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]

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

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 ExemptionLeast of the following is exempt:a) Actual HRA Receivedb) 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 CommissionNote:i. Fully Taxable, if HRA is received by an employee who is living in his own house or if he does not pay any rentii. 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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