For individual taxpayers, the tax rates are different and are based on the income levels.
The last date to file one’s income tax return for the financial year 2018-19 or the assessment year 2019-20 is July 31, 2019, unless extended by the government. While the total income, after taking into account the deductions, if any, is exempt from income tax up to a limit of Rs 2.5 lakh per annum, any income above that is taxed.
However, taxation is slab based and also depends on the age of the individual taxpayer. For non-senior citizens, income between Rs 2.5 lakh and Rs 5 lakh is taxed at 5 per cent. Further, income between Rs 5 lakh and Rs 10 lakh is taxed at 20 percent, while income above Rs 10 lakh is taxed at 30 per cent.
The income that one earns determines the tax rate applicable to him or her and accordingly tax is calculated. For individual taxpayers, the tax rates are different based on the income levels. There are three tax slabs in the country – 5 per cent, 20 per cent and 30 per cent.
Once, the tax liability is arrived at, there is a 4 per cent ‘Health & education cess’ on the amount of tax payable. So, effectively, the three tax rates of 5 per cent, 20 per cent and 30 per cent become 5.12 per cent, 20.8 per cent and 31.2 per cent respectively.
For the gross total income that you have earned in financial year 2018-19, its assessed in the assessment year 2019-20 and the ITR needs to be filed by the due date.
Tax Rates – In case of an Individual
Tax Rates – In case of a resident senior citizen (who is 60 years or more at any time during the previous year but less than 80 years on the last day of the previous year)
Tax Rates – In case of a resident super senior citizen (who is 80 years or more at any time during the previous year)
Health and Education Cess, Rebate under Section 87A and Surcharge for AY 2019-20
While calculating the actual tax liability for the assessment year 2019-20, based on one’s income, you will need to keep note of the following three points.
1. Health and Education Cess: The amount of income tax and the applicable surcharge, will have to be further increased by health and education cess calculated at the rate of 4 per cent of such income-tax and surcharge.
2. Rebate under Section 87A: The rebate is available to a resident individual if his total income does not exceed Rs. 3.5 lakh. The amount of rebate shall be 100 per cent of income tax or Rs. 2,500, whichever is less. For the AY 201-21, the limit is raised to Rs 5 lakh and a maximum rebate of Rs 12,500 will be allowed.
When income is between Rs 50 lakh and Rs 1 crore: The amount of income tax shall be increased by a surcharge at the rate of 10 per cent of such tax, where total income exceeds Rs 50 lakh but does not exceed Rs 1 crore.
When income exceeds Rs 1 crore: The amount of income tax shall be increased by a surcharge at the rate of 15 per cent of such tax, where total income exceeds Rs 1 crore.