In India, calculation of income tax is based on applying different tax rates to different annual income groups, which are called Income tax slab.
For
calculating income tax, first of all, we need to calculate actual annual
taxable income as per the provisions of various sections in the Income Tax Act.
Like: Income
under the heads Salaries, House Property, Profit and Gains of business or
profession and Income from other sources.
Thereafter,
latest tax slab rate are apply on taxable income.
The
following are the current slab rate explained for Individuals and
Companies.
SLAB RATE
FY. 2019-20 (AY - 2020-21)
Income Tax Slab for Individual FY. 2019-2020
For Individuals below 60 years of age
|
Income
(Rupees) |
Rate
of Tax |
|
Upto 2,50,000 |
Nil |
|
2,50,000
to 5,00,000 |
5%
of Income exceeding |
|
5,00,000
to 10,00,000 |
rupees
12500 + 20% of Income exceeding |
|
Above 10,00,000 |
rupees
1,12,500 + 30% of Income exceeding |
For Individuals of age 60 years or more but less than 80 years
|
Income
(Rupees) |
Rate
of Tax |
|
Upto 3,00,000 |
Nil |
|
3,00,000
to 5,00,000 |
5%
of Income exceeding rupees
3,00,000 |
|
5,00,000
to 10,00,000 |
rupees
10,000 + 20% of Income exceeding rupees
5,00,000 |
|
Above 10,00,000 |
rupees
1,10,000 + 30% of Income exceeding rupees
10,00,000 |
For Individuals of age 80 years or more
|
Income
(Rupees) |
Rate
of Tax |
|
Upto 5,00,000 |
Nil |
|
5,00,000
to 10,00,000 |
20%
of Income exceeding rupees
5,00,000 |
|
Above 10,00,000 |
rupees
1,00,000 + 30% of Income exceeding rupees
10,00,000 |
After calculating tax on income, an
additional tax is levied known as Surcharge if:
|
Income
(Rupees) |
Rate
of Surcharge |
|
Above 50,00,000
but upto 1 Crore |
10
% |
|
Above 1
Crore but upto 2 Crores |
15
% |
|
Above 2
Crores but upto 5 Crores |
25
% |
|
Above 5
Crores |
37
% |
After calculating above
taxes Additional cess on income tax is levied of 4 % for Health and
Education Cess.
REBATE [section 87 A]
A
resident individual whose total income does not exceed rupees 5,00,000 is
eligible for rebate.
The
amount of rebate shall be least of the following:
(i) Tax calculated (before cess) or
(ii) Rupees 12,500
Individuals
whose income exceeds rupees 5,00,000 does not get the benefit of Rebate.
Income Tax Slab for Companies FY. 2019-2020
Till
now, I have discussed individual tax calculation, now I am going to explain the
Tax rates applicable for Domestic Companies, Foreign Companies,
Co-operative Societies, Partnership Firms and Local Authorities.
Slab Rate - Domestic Companies
(a) If Gross Turnover upto 400 Crores in the previous year
|
Tax
Rate |
Surcharge |
Cess |
|
Flat
Rate 25 % |
Annual
Income (Rupees) (a)
Between 1 Crore – 10 Crores - 7 % (b)
more than 10 Crores - 12 % |
4
% |
(b) If Gross Turnover exceeding 400 Crores in the previous year
|
Tax
Rate |
Surcharge |
Cess |
|
Flat
Rate 30 % |
Annual
Income (Rupees) (a)
Between 1 Crore – 10 Crores - 7 % (b)
more than 10 Crores - 12 % |
4
% |
Slab Rate - Foreign Companies
|
Tax
Rate |
Surcharge |
Cess |
|
Flat
Rate 40 % |
Annual
Income (Rupees) (a)
Between 1 Crore – 10 Crores - 2 % (b)
more than 10 Crores - 5 % |
4
% |
Slab Rate - Co-operative Societies
|
Tax
Rate |
Surcharge |
Cess |
|
Slab
Rate Upto 10,000 -
10% 10,000
to 20,000 -
20% Above 20,000 -
30% |
Annual
Income (Rupees) More
than 1 Crore - 12% |
4
% |
Slab Rate - Partnership Firms and Limited Liability Partnership (LLP)
|
Tax
Rate |
Surcharge |
Cess |
|
Flat
Rate 30 % |
Annual
Income (Rupees) More
than 1 Crore - 12 % |
4
% |
Slab Rate - Local Authorities
|
Tax
Rate |
Surcharge |
Cess |
|
Flat
Rate 30 % |
Annual
Income More
than 1 Crore - 12 % |
4
% |
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