The Act of income tax makes it compulsory for all the citizens of India and business firms to pay income tax. They are liable to pay the tax if their income is above the tax slab’s minimum income. Tax Payers can avail of the benefits of the tax under several sections of the income tax act. If taxpayers checked their tax slab and planned at the right time, it will help them add more money to their deposits. So at first, you all have to know that what is Income Tax Slab?
Income Tax Slab
As an individual, everyone works hard to grow their incomes with time. If you are a salaried individual of government or non-government or a businessman in India, then you must have to pay the tax according to the total income tax slab rate that how much you will learn in a Financial year. According to the annual income, all the individuals are categorized within a system that every individual should have to pay tax accordingly to their income tax slab rates. In the tax slab, different tax is levied on different incomes. Furthermore, the income tax slab rates are rectified, improved, and may change during the central government’s budget sessions held every year. But during the central government budget session 2019, they announced no changes in the income tax slabs for the Fy 2019-2020.
In Terms Of The Age, Taxpayers Fall Into Three Categories:-
- Any individual (resident or non-resident) is of fewer than 60 years on the last day of the relevance.
- Senior citizens of India belong to the age group of 60 years to 80 years during the previous year.
- Super senior citizen is a resident of India and has 80 years or more during the financial year.
Income Tax Slabs For Individuals Within 60 Years Of Age For FY 2019/2020
For your better understanding, look at an example:-
Let Mr.X is 42 years old and has an annual income of Rs. Seven lakh. How much income tax he has paid?
According to the income tax slab:-
Income tax on Rs 2.5 lakh is Nil so tax payable is 0
Income tax on Rs 2.5 lakh to 5 lakh is 5% , (5 lakh – 2.5 lakh) = 2.5 lakh
So tax payable is 12,500
Income tax on Rs 5 lakh to 7 lakh is 20% , (7 lakh – 5 lakh) = 2 lakh
So tax payable is 40,000b
Total income tax is ( Rs 0 + Rs 12,500 + Rs 40,000)
= Rs 52,500
Plus cess of 4% on Rs 52,500 = 2,100
So Total income tax payable Rs = 52,500 + 2,100
The income tax act, 1961, also allows for deduction under section 80(C) and 80(U). So for that case, tax is calculated after considering such deduction and cess added to arrive at the local tax payable.
Income-Tax Slab For Senior Citizens Aged Between 60 to 80 Years For FY 2019/2020
Like the previous point here also if someone’s income is 7 lakh in a year, he or she has to pay income tax Rs 54,600, but if someone between the age group 60 to 80 earns 3 lakh, then he or she don’t have to pay any tax that is a difference between the 1st and 2nd point. Where below 60 ages have to pay tax when the income goes 2.5 lakh but not for the age group between 60 to 80. They have to pay tax only when their income comes to 3 lakh.
Income Tax Slabs For Super Senior Citizens Aged Over 80 years:-
From these three points, everyone will get a clear idea about the income tax slab, and with the example which we described, every point would be cleared for everyone.
Some points which are related to the above income tax slabs you must have to know:-
- The income tax slabs and rates for the financial year 2019-2020 are the same for both men and women.
- If someone’s income lies in the tax slab of a maximum of 5 lakh rupees, then you will be available for the full tax rebate under section 87A.
- The rates which we mentioned above of the income tax slabs do not suppress the cess and surcharge.
So now we will discuss the surcharges applicable for resident individuals:-
For the financial year, 2019-2020 new surcharges have also been put on for the rich. Here is a table for your understanding:-
Income Tax Slabs For The Other Entities For FY 2019/2020
Now we are going to discuss the other entities’ income tax slab –
1. For The Domestic Or Civil Companies-
For a domestic or civil company, the tax will be applicable for a given FYreclaineson the gross annual turnover which earned in the previous year –
According to the budget session’s announcement, the introduction of income tax slab 2019-2020 takes the new gross turn over Rs 400 crore limit for the purpose. Also, a surcharge will be applied if the income lies between 1 crore to 10 crores. And for the above 10 crore surcharge applies to 10%. With the health and educational cess of 4%.
2. For The Partnership Firms And LLP(Limited Liability Partnership)
There are no alternative income tax brackets for the partnership firms and LLPs as the total income is taxable at the rate of 30%. The surcharge levied on forms falls into two categories mentioned below –
- If total income is between 1 crore to 10 crore, then the tax will be calculated at 7%.
- And above 10 crores, the tax will be calculated at 12%.
With the health and education cess of 4%.
3. For the Cooperative Society:-
The income tax slab rates for the cooperative societies are given below in a table-
And also, a surcharge applies to 12% if income is above Rs 1 crore.
4. For Local Authorities:-
The local authorities, which they will earn, are also taxable, but there are no slab divisions. They are taxed at a flat rate of 30%, and a surcharge is also applicable if the income exceeds Rs 1 crore. With the health and Educational cess of 4%.
How To Increase Your Savings From The Income Tax For The Financial Year 2019-2020:-
It is an essential thing to know about the income tax slabs. It not only tells you about the tax slabs but also prepares you for various tax-saving investments.
Depending on the income tax slab for the assessment year 2020-2021, you can increase your savings and get the benefits of tax-saving investments. Many taxpayers, for their delaying tactics, they will get the results in a failing of saving tax. Investment in tax saving schemes and using a tax calculator wisely will make your total annual income fall into a lower tax bracket.
With exact planning for the AY’s income tax slabs, 2020-2021 gets deducted from the gross total income. If you have to know more details about it, then you can hire a professional.
1. Buy Life Insurance Or Health Insurance
The health insurance will save your families from the unexpected financial impose that may arise in accidental purpose. Under section 80D, the donation you will pay in any mode except cash to defend your family partners. Then transmitted is available for a deduction of 25,000 maximum and 50,000 for the senior citizens.
2. Submit Rent Receipts
i. If you pay any home rent
ii. If you receive HRA from the employees.
iii. 50% of your salary if you live in a metropolitan city and 40% if you live in a non-metropolitan city.
3. In Case If You Give Any Charitable Donations
4. Higher Education Loan For The Child
5. A New Home Through Home Loan
Frequently Asked Questions
1. How will the government collect income tax?
TDS( tax dedicated source) from an individual’s income source.
TCS ( tax collected at source)
2. How is taxable income different from exempted income?
On the other side, taxable income from the ultimate part of your total earnings will throw out the rescued income; then, you have to pay the tax, depending on the tax liability as per the income tax bracket.
3. Who must have to pay the income tax?
4. Is filling income tax necessary if a person’s annual income is less than Rs 2.5 lakh?
5. Who is eligible to avail of the rebate under section 87A?
6. Is it necessary to maintain all records or proof of the income?
7. Do I get any benefit from filing ITR on time?