Every person whether individual, company, partnership, LLP, or association of person or any other, has to pay tax on the income earned during the previous year. The Income Tax Act, 1961 has prescribed rules for calculating income earned by such persons during the year. Whereas, the Finance Act introduced by the Government of India each year prescribes the rate. The Income tax slab rates for FY 19-20 prescribes the rates for this financial year. It is important to note that when individuals are partners or directors in any company, their receipts are taxable in hands as individuals and rules are applicable accordingly.
Income Tax Slab Rates for FY 2019-20
1. Individuals\HUF
Following income tax slab rates are applicable for individuals who are less than 60 years old
| Income (Rs.) | Tax |
| Up to 2,50,000 | NIL |
| 2,50,001 to 5,00,000 | 5% of total income exceeding 2,50,000 |
| 5,00,001 to 10,00,000 | 12,500 + 20% of total income exceeding 5,00,000 |
| Above 10,00,000 | 1,12,500 + 30% of total income exceeding 10,00,000 |
Income Tax Slab Rates for Individuals (Seniors) who are 60 or more years old but less than 80 years old.
| Income (Rs.) | Tax |
| Up to 3,00,000 | NIL |
| 3,00,001 to 5,00,001 | 5% of total income exceeding 3,00,000 |
| 5,00,001 to 10,00,000 | 10,000 + 20% of income exceeding 5,00,000 |
| Above 10,00,000 | 1,10,000 + 30% of total income exceeding 10,00,000 |
Income Tax Slab Rates for Individuals (Super Seniors) who are 80 or more years old:
| Income (Rs.) | Tax |
| Up to 5,00,000 | NIL |
| 5,00,001 to 10,00,000 | 20% of income exceeding 5,00,000 |
| Above 10,00,000 | 1,00,000 + 30% of total income exceeding 10,00,000 |
Points to Remember:
- Under section 87A, a tax rebate of Rs. 12,500 is allowed, to individuals, whose income during the previous year does not exceed Rs. 5,00,000.
- Cess is charged at a rate of 4%.
- The surcharge is also charged depending on the income earned during the year
| Net Income | Rate of surcharge |
| More than Rs. 50 Lakhs but does not exceed Rs. 1 crore | 10% |
| More than Rs. 1 crore but does not exceed Rs. 2 crores | 15% |
| More than Rs. 2 crores but does not exceed Rs. 5 crores | 25% |
| More than Rs. 5 crores | 37% |
2. Income Tax Slab Rates for Partnership Firm
The income tax rate charged for a Partnership Firm and Limited Liability Partnership (LLPs) is 30%.
- The surcharge is charged @ 12%; if income is more than Rs. 1 crore (Marginal Relief is available).
- Cess is calculated at 4%
3. Income Tax Slab Rates for Companies
The rate of income tax charged on the income of the company depends upon the section under which the income of such a company is taxable. The following points enumerate different income tax slab rates.
a. Income Tax for Domestic Companies
Claiming exemption & turnover in 2017-18 up to Rs. 400 crores
- Tax is charged at 25%
- Surcharge:
| Income | Rate |
| If income is between Rs. 1 crore to Rs. 10 crores | 7% |
| If Income is more than Rs. 10 crores | 12% |
- Minimum Alternate Tax (MAT)
- Marginal Relief Available
- Cess is charged @ 4% on sum (income tax + surcharge)
b. Claiming exemptions & turnover in 2017-18 more than Rs. 400 crores.
- Tax is charged at 30%
- Surcharge:
| Income | Rate |
| If income is between Rs. 1 crore to Rs. 10 crores | 7% |
| If Income is more than Rs. 10 crores | 12% |
- Minimum Alternate Tax (MAT) is applicable
- Marginal Relief Available
- Cess is charged @ 4% on sum (income tax + surcharge)
c. Domestic Manufacturing Company u/s 115BA
- Tax is charged at 25%
- Surcharge:
| Income | Rate |
| If income is between Rs. 1 crore to Rs. 10 crores | 7% |
| If Income is more than Rs. 10 crores | 12% |
- Cess is charged @ 4% on sum (income tax + surcharge)
d. Domestic Company claiming exemption u/s 115BAA
- Tax is charged at 22%
- A surcharge will be charged at 10%
- Cess @ 4% (MAT NOT APPLICABLE)
e. Domestic Manufacturing Company u/s 115BAB
- Tax is charged at 15%
- A surcharge will be charged at 10%
- Cess @ 4% (MAT NOT APPLICABLE)
4. Income tax slab rates for Foreign Company
- Foreign companies are taxed at a rate of 40%.
- Surcharge:
| Income | Rate |
| If income is between Rs. 1 crore to Rs. 10 crores | 2% |
| If Income is more than Rs. 10 crores | 5% |
- Cess is charged @ 4%
5. Income tax slab rates for Co-operative Society
There is a prescribed income tax slab rate for co-operative societies. The slab for co-operatives societies are as follows:
| Income | Rate |
| Up to Rs. 10,000 | 10% |
| Rs. 10,000 to Rs. 20,000 | 20% |
| Above Rs. 20,000 | 30% |
- The surcharge is charged at 12% if income is more than Rs. 1 crore
- Cess is charged @ 4%
FREQUENTLY ASKED QUESTIONS (FAQs)
1. What are the criteria to determine the income tax slab rates for individuals?
The criteria to select a slab rate for individuals depends upon the age of the individual.
2. What is the rate of tax charged on a limited liability partnership?
The income of an LLP is charged at the flat tax rate of 30%.
3. What is the tax rate for companies whose turnover is more than Rs. 400 crores during the year 2017-18?
The company had a turnover of more than Rs. 400 crore during the year 2017-18 needs to pay tax 30%.
4. What is the tax rate for a domestic company under section 115BAB?
The income of a domestic manufacturing company shall be charged at 15% under section 115BAB.
5. What is the rebate under section 87A?
Any individual whose income during the year is not more than Rs. 500,000 is allowed a rebate of up to Rs. 12,500. Thereby, bringing down any tax payable to zero.
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