The income tax liability of a person can be calculated on the basis of income tax slab for the relevant assessment year. So, income tax for the current assessment year can be calculated on the help of income tax slab for assessment year (A.Y.) 2019-20.
It is really important to know the correct slab otherwise all the tax calculation will incorrect.
Contents
a) Normal Tax Rates for the assessee other than the firm, company and co-operative society.
For the resident individual whose age is 60 years or more but less than 80 years during the previous year:
| Amount of Income |
Tax Rate |
| Up to Rs. 300000 |
Nil |
| From Rs. 300001 to Rs. 500000 |
5% |
| From Rs. 500001 to Rs. 1000000 |
20% |
| From Rs. 1000001 and above |
30% |
For the resident individual whose age is 80 years or more:
| Amount of Income |
Tax Rate |
| Up to Rs. 500000 |
Nil |
| From Rs. 500001 to Rs. 100000 |
20% |
| From Rs. 1000001 and above |
30% |
For any other residential individual (below 60 years of age), any non-resident individual, HUF/AOP/BOI/Artificial Judicial Person
| Amount of Income |
Tax Rate |
| Up to Rs. 250000 |
Nil |
| From Rs. 250001 to Rs. 500000 |
5% |
| From Rs. 500001 to Rs. 1000000 |
20% |
| From Rs. 1000001 and above |
30% |
Health and Education Cess.
It is 4% on income-tax and surcharge (if any).
Compute the tax liability of Mr. Avishek. Total Income is Rs. 1500000. Assume his age is i) more than 80 years, ii) more than 60 years but less than 80 years and iii) less than 60 years.
Answer:
i) Age is more than 80 Years.
| Particulars | Calculation | Amount | |
| Up to Rs. 500000 | Nil Rate | Nil | |
| From Rs. 500001 to Rs. 1000000 | (10 Lakh-5Lakh)*20% | 100000 | |
| From Rs. 1000001 to Rs. 1500000 | (15 Lakh-10Lakh)*30% | 150000 | |
| Total Amount of Tax | 250000 | ||
| Add: Health & Education Cess | (250000*4%) | 10000 | |
| Total Tax Payable by Mr. Avishek | 260000 | ||
ii) Age is more than 60 years but less than 80 years.
| Particulars | Calculation | Amount |
| Up to Rs. 300000 | Nil Rate | Nil |
| From Rs. 300001 to Rs. 500000 | (5lakh-3lakh)*5% | 10000 |
| From Rs. 500001 to Rs. 1000000 | (10lakh-5lakh)*20% | 100000 |
| From Rs. 1000001 to Rs. 1500000 | (15lakh-10lakh)*30% | 150000 |
| Total Amount of Tax | 260000 | |
| Add: Health & Education Cess | (Rs. 260000*4%) | 10400 |
| Total Tax Payable by Mr. Avishek | 270400 | |
iii) Age is less than 60 Years
| Particulars | Calculation | Amount |
| Up to Rs. 250000 | Nil Rate | Nil |
| From Rs. 250001 to Rs. 500000 | (5lakh-2.5lakh)*5% | 12500 |
| From Rs. 500001 to Rs. 1000000 | (10lakh-5lakh)*20% | 100000 |
| From Rs. 1000001 to Rs. 1500000 | (15lakh-10lakh)*30% | 150000 |
| Total Amount of Tax | 262500 | |
| Add: Health & Education Cess | (Rs. 262500*4%) | 10500 |
| Total Tax Payable by Mr. Avishek | 273000 | |
c) Firm/LLP/Local Authority
A Firm/LLP/Local Authority shall be taxable @ 30% of the total income.
Health & Education Cess is 4%.
d) Company
The rate of tax is given below:
Domestic Company
| Particulars |
Rate |
| Where the total turnover/gross receipts of a company during the previous year does not exceed Rs. 250 Crore. |
25% |
| Any other domestic company. |
30% |
Foreign Company
| Nature of Income |
Rate |
| Royalty received from Govt. or an Indian Concern in pursuance of an agreement made by it with the Indian Concern after March 31, 1961, but before April 1, 1976, or fees for rendering technical services in pursuance of an agreement made by it after February 29, 1964 but before April 1, 1976 and where such agreement has, in either case, been approved by the Central Government. |
50% |
| Other Income |
40% |
e) Co-operative Society
Income Tax Slab for Co-operative Society for the A.Y. 2019-20 is given below:
| Amount of Income |
Rate |
| Up to Rs. 10000 |
10% |
| From Rs. 100001 to Rs. 20000 |
20% |
| Above Rs. 20000 |
30% |
In all the above cases Health & Education Cess is 4% on income tax plus surcharge (if any).
f) Surcharge
In case of Individual/HUF/BOI/Artificial Judicial Person
| Particulars | Rate |
| If the Net Income is more than Rs. 50 Lakh but not more than Rs. 1 Crore. | 10% of Income Tax |
| If the Net Income is more than Rs. 1 Crore. | 15% of Income Tax |
In the case of Firm/LLP/Local Authority
The surcharge is 12% of income-tax if the amount of net income is more than Rs. 1 Crore.
In the case of Company
| Company | If net income is more than Rs 1 Crore but not more than Rs. 10 Crore | If net income exceeds Rs. 10 Crore |
| Domestic Company | 7% | 12% |
| Foreign Company | 2% | 5% |
In the case of Co-operative Society
The Surcharge is 12% of income tax if the net income exceeds Rs. 1 Crore.
(Note: The Surcharge is subject to Marginal Relief)
g) Marginal Relief
It is a very important and interesting part of the total income tax portion.
As you already know that surcharge is applicable when your total income exceeds a certain prescribed limit.
In that case, your total tax liability will be the amount of tax as per tax rate plus the amount of surcharge.
The surcharge is subject to marginal relief.
If the net income exceeds the prescribed limits applicable for the surcharge, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on the amount of prescribed limits by more than the amount of income that exceeds the prescribed limits.
For example, the income of Mr. Avishek is Rs. 5050000. It is more than Rs 50 lakh. So, it is subject to surcharge @ 10% of income tax.
The amount of tax of the above amount is Rs. 1327500.
The amount of surcharge will be Rs 132750 i.e. 10% of income tax.
Total amount = Rs 1460250.
If the income was Rs 50 lakh then the amount payable as income tax will be Rs. 1312500.
Now you can see when the amount of income is increased by Rs. 50000, the tax liability is increased by Rs. 147750.
It is totally unfair!
To prevent this, the marginal relief is provided to the taxpayers.
Now, what will be the amount of marginal relief?
It will be the difference between the amount of incremental tax and incremental income.
Therefore, in this case, the marginal relief will be Rs. 97750 (Rs. 147750 minus Rs. 50000).
Tax payable after considering marginal relief will be Rs. 1362500 (Rs. 1460250 minus Rs. 97750).
Final Word
I hope you can now understand the income tax slab for the A.Y. 2019-20. Now you have no problem to find out your tax liability.
In case of any problem in your return filing process, please inform me.
I will help you.
You can also read
- 18 Mistakes you should avoid while income tax return filing.
- Tax on Dividend Income in India.
- House Rent Allowance- HRA Rules for Income Tax
- Taxability of Gifts: Gift Tax and Its Exemption Rules