Rates of Income tax for Financial year 2019-20 i.e. Assessment year 2020-21
(A) Income tax Rates for Individual, HUF, AOP & BOIs
- Income tax rates for resident senior citizen who is 60 years or more at any time during the previous year but less than 80 year on the last day of the previous year (born between 02-04-1940 to 01-04-1960)
| Range of Net income (Rs.) | Income tax rates | Surcharge | Health & Edu. Cess |
|---|---|---|---|
| Upto 300000/- | nil | nil | nil |
| 300000/- to 500000/- | 5% of (Total income less Rs. 300000/-) | nil | 4% of income tax |
| 500000/- to 1000000/- | Rs. 10000 + 20% of (Total income less Rs. 500000/-) | nil | 4% of income tax |
| 1000000/- to 5000000/- | Rs. 110000 + 30% of (Total income less Rs. 1000000/-) | nil | 4% of income tax |
| 5000000/- to 10000000/- | Rs. 1310000 + 30% of (Total income less Rs. 5000000/-) | 10% of income tax | 4% of income tax & surcharge |
| above Rs. 10000000/- | Rs. 2810000 + 30% of (Total income less Rs. 10000000/-) | 15% of income tax | 4% of income tax & surcharge |
- Income tax rates for resident super senior citizen who is 80 years or more at any time during the previous year (born before 02-04-1940)
| Range of Net income (Rs.) | Income tax rates | Surcharge | Health & Edu. Cess |
|---|---|---|---|
| Upto 500000/- | nil | nil | nil |
| 500000/- to 1000000/- | 20% of (Total income less Rs. 500000/-) | nil | 4% of income tax |
| 1000000/- to 5000000/- | Rs. 100000 + 30% of (Total income less Rs. 1000000/-) | nil | 4% of income tax |
| 5000000/- to 10000000/- | Rs. 1300000 + 30% of (Total income less Rs. 5000000/-) | 10% of income tax | 4% of income tax & surcharge |
| above Rs. 10000000/- | Rs. 2800000 + 30% of (Total income less Rs. 10000000/-) | 15% of income tax | 4% of income tax & surcharge |
- Income tax rates for other resident individual (born after 01-04-1960), any non-resident individual, HUF, BOI, AOP, Artificial judicial perosn
| Range of Net income (Rs.) | Income tax rates | Surcharge | Health & Edu. Cess |
|---|---|---|---|
| Upto 250000/- | nil | nil | nil |
| 250000/- to 500000/- | 5% of (Total income less Rs. 250000/-) | nil | 4% of income tax |
| 500000/- to 1000000/- | Rs. 12500 + 20% of (Total income less Rs. 500000/-) | nil | 4% of income tax |
| 1000000/- to 5000000/- | Rs. 112500 + 30% of (Total income less Rs. 1000000/-) | nil | 4% of income tax |
| 5000000/- to 10000000/- | Rs. 1312500 + 30% of (Total income less Rs. 5000000/-) | 10% of income tax | 4% of income tax & surcharge |
| above Rs. 10000000/- | Rs. 2812500 + 30% of (Total income less Rs. 10000000/-) | 15% of income tax | 4% of income tax & surcharge |
Note:-
(1)Rebate under section 87A, A resident individual whose net income does not exceed Rs. 500000/- can avail rebate u/s 87A which is an amount equal to 100% of income tax or Rs. 12500/- whichever is less. Rebate u/s 87A is deductible from income tax before calculating education cess.
(2) If Net income exceeds Rs. 50 lakhs but does not exceeds Rs. 1 crore then surcharge @ 10% is applicable but if net income exceeds Rs. 1 crore then surcharge is applicable at the rate of 15% of income tax. Further surcharge is subject to marginal relief i.e amount payable as income tax & surcharge shall not exceed the total amount payable as income tax on total income of Rs. 50 Lakhs (or 1 Crore as the case may be) by more than the amount of income that exceeds Rs. 50 Lakhs ( or 1 crore as the case may be).
(3) Health and Education Cess” is 4% and it is to be levied on income tax & Surcharge. Surcharge is calculated on income tax before adding HEC. But HEC are calculated on income tax including surcharge if any.
(4) Alternate minimum tax: Tax payable cannot be less than 18.5% (+SC+EC+SHEC) of adjusted total income u/s 115JC. (Not applicable to those individual, HUF, AOP, BOI & AJP whose adjusted total income does not exceed Rs. 20 Lakhs AND who are not claiming any deduction u/s 10AA/ 35AD/ Chapter VI heading C-“deduction for certain incomes”.)
(5) A standard deduction of `50,000/- is allowed from salary income but this is in lieu of the earlier exemption in respect of transport allowance and reimbursement of miscellaneous medical expenses.(Reimbursement by the employer for amount spent by employee for medical treatment of self or his family was exempt upto Rs. 15000/- in a year upto FY 2017-18 but this exemption is withdrawn from FY 2018-19 after introduction of standard deduction) However, the transport allowance at enhanced rate shall continue to be available to differently abled persons.
(B) Income tax Rates for Firms
- For FY 2019-20, Income of Firms is taxable at the rate of 30%.
- Business under Proprietorship is not covered here, Income from Proprietorship is taxable in the hand of Proprietor in his Individual return under the head “PGBP – Profits & Gains of Business or Profession” .
- Surcharge:- In case income of firm exceeds Rs. 1 crore then surcharge @ 12% of income tax is applicable which is subject to marginal relief ie. The amount payable as income tax & surcharge shall not exceed the total amount payable as Income tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.
- Health & Edu. Cess: 4% “Health and Education Cess” to be levied on the tax payable & Surcharge.
- Alternate minimum tax: Tax payable by firm cannot be less than 18.5% (+SC+EC+SHEC) of adjusted total income u/s 115JC.
(C) Income tax Rates for Companies
- Rate of income tax For FY 2019-20 for companies is as given below:
| Company | Category | Tax Rate |
|---|---|---|
| Domestic Company | (1) Domestic Company:-where total turnover or gross receipts during financial year 2017-18 does not exceed Rs. 400 crore. | 25% |
| (2) Where it opted for Section 115BA | 25% | |
| (3) Where it opted for Section 115BAA | 22% | |
| (4) Where it opted for Section 115BAB | 15% | |
| (5) any other domestic Company | 30% | |
| Foreign Company | (1) Royalty received form Government or Indian concern in pursuance of an agreement made by it after 31st march 1961 but before 1st April 1976 or fee for rendering technical services in pursuance of an agreement made by it after 29th February 1964 but before 1st April 1976 And where such agreement has been approved by Central Government. | 50% |
| (2) Other Income | 40% |
- Surcharge: If net income of a company does not exceed Rs. 1 crore, surcharge will be nil . For other cases, rate of Surcharge to be calculated on Income tax are given below:- (However Surcharges are subject to marginal Relief as under:-
- i)Where income exceeds Rs. 1 crore but not exceeding Rs. 10 crore, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.
- ii)Where income exceeds Rs. 10 crore, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 10 crore by more than the amount of income that exceeds Rs. 10 crore)
| Company | If net income is more than Rs. 1 crore but not more than Rs. 10 crore. | If net income is more than Rs. 10 crore. |
|---|---|---|
| Domestic Company | 7% | 12% |
| Foreign Company | 2% | 5% |
- HEC: 4% “Health and Education Cess” to be levied on the tax & surcharge.
- A company is required to pay higher of the tax calculated under the following two provisions:
- Tax liability as per the Normal provisions of income tax act(as stated above)
- Tax liability as per the MAT provisions given in Sec 115JB(18.5 % of Book Profits plus HEC & surcharge if applicable. ( Note that Section 115JB of the Income-tax Act was amended by the Taxation Laws (Ordinance), 2019 (‘Ordinance’) to reduce the rate of MAT from 18.5% to 15% with effect from Assessment Year 2020-21.However, the Taxation Laws (Amendment) Bill, 2019, as tabled in the parliament on 25-11-2019, proposes to insert a proviso to section 115JB(1) that the rate of minimum alternative tax shall be reduced from 18.5% to 15% from previous year commencing on or after the April 1, 2020)
(D) Income tax Rates for Co-operative Societies
- Rates of income tax For FY 2019-20 for co-operative societies are as given below:
| Net Income Range | Rate of Tax |
|---|---|
| Upto Rs. 10000/- | 10% |
| Rs. 10000 to Rs. 20000 | 20% |
| Above Rs. 20000/- | 30% |
- Surcharge:- In case income of co-operative society exceeds Rs. 1 crore then surcharge @ 12% of income tax is applicable which is subject to marginal relief ie. The amount payable as income tax & surcharge shall not exceed the total amount payable as Income tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.
- EC & SHEC: 4% “Health and Education Cess” to be levied on the tax & surcharge.
- Alternate minimum tax: Tax payable by co-operative society cannot be less than 18.5% (+SC+EC+SHEC) of adjusted total income u/s 115JC.
(E) Income tax Rates for Local Authorities
- For FY 2019-20, Income of Local Authority is taxable at the rate of 30%.
- Surcharge:- In case income exceeds Rs. 1 crore then surcharge @ 12% of income tax is applicable which is subject to marginal relief ie. The amount payable as income tax & surcharge shall not exceed the total amount payable as Income tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.
- Health & Edu. Cess:The existing 3% education cess is replaced by a 4% “Health and Education Cess” to be levied on the tax & surcharge.
- Alternate minimum tax: Tax payable cannot be less than 18.5% (+SC+EC+SHEC) of adjusted total income u/s 115JC.
(F) Income taxable at rate specified in Income tax Act. (Income taxable at special rates)
Following given are list of some important cases of income which is taxable at rates specified in Income-tax Act and not at rates mentioned above:-
| Section | Income | Income tax rate |
|---|---|---|
| 111A | Short term capital Gain (where STT applicable) | 15% |
| 112 | Long Term Capital Gain | 10% / 20% |
| 112A | Long Term Capital Gain in excess of Rs. 1 lakh | 10% |
| 115BB | Winning from lotteries, Crossword puzzles, race horse (excluding activity of owning & maintaining race horses), card games and other games of gambling | 30% |
| 115B | Profits & gains of Life insurance business | 12.5% |
Some important changes in for FY 2019-20:-
- Limit of Rebate under section 87A is increased to Rs. 12500/- from 2500/- and Further condition of net taxable income for claiming the rebate is also increased to Rs. 500000/– from Rs. 350000/-. From Fy 2019-20, this rebate is available if total income of resident individual is upto Rs. 500000/-.
- Threshold limit u/s 194A, for deduction of TDS form interest other than interest on securities is increased to Rs. 40000/- from Rs. 10000/-. This limit was already increased to Rs. 50000/- for senior citizens.
- Threshold limit u/s 194I, for deduction of TDS form Rent is increased to Rs. 240000/- from Rs. 180000/- from FY 2019-20.
- Exemption u/s 54 extended to purchase /construction of two residential houses.
- Notional Rent on second self occupied house property is exempt from tax. refer section 23 & 24.
- In the Union Budget, 2017, corporate tax rate was reduced to 25% for companies whose turnover was less than `50 crore in financial year 2015-16. In Budget 2018, the benefit of this reduced rate of 25% also to companies who have reported turnover up to`250 crore in the financial year 2016-17. In Budget 2019, the benefit of this reduced rate of 25% also to companies who have reported turnover up to`400 crore in the financial year 2017-18.
- A standard deduction from salary income is increased to Rs. 50000/- from Rs. 40000/- but this is in lieu of the earlier exemption in respect of transport allowance and reimbursement of miscellaneous medical expenses. However, the transport allowance at enhanced rate shall continue to be available to differently abled persons.