Different tax rates have been provided for various categories of taxpayers and for different sources of income. Individuals/HUFs/AOP/BOI are taxed as per the different slab rates. However, companies are taxed at fixed rate, except for certain specified incomes. This write-up will provide you the information on Income Tax tax rates applicable to various taxpayers for AY 2020-21/FY 2019-20.

Income Tax Rates for Assessment Year 2020-21 / Financial Year 2019-20

In case of an Individual (resident or non-resident) or HUF or Association of Person or Body of Individual or any other artificial juridical person

Assessment Year 2019-20

Taxable Income Tax Rate
Up to Rs. 2,50,000 Nil
Rs. 2,50,000 to Rs 5,00,000 5%
Rs. 5,00,000 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

Less: Rebate under Section 87A [see Note]

Add: Health and Education Cess [see Note]

Assessment Year 2020-21

Taxable Income Tax Rate
Up to Rs. 2,50,000 Nil
Rs. 2,50,000 to Rs 5,00,000 5%
Rs. 5,00,000 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

Less: Rebate under Section 87A [see Note]

Add: Surcharge and Health & Education Cess [see Note]

2. 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)

Assessment Year 2019-20

Taxable Income Tax Rate
Up to Rs. 3,00,000 Nil
Rs. 3,00,000 to Rs 5,00,000 5%
Rs. 5,00,000 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

Less: Rebate under Section 87A [see Note]

Add: Health and Education Cess [see Note]

Assessment Year 2020-21

Taxable Income Tax Rate
Up to Rs. 3,00,000 Nil
Rs. 3,00,000 to Rs 5,00,000 5%
Rs. 5,00,000 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

Less: Rebate under Section 87A [see Note]

Add: Surcharge and Health & Education Cess [see Note]

3. In case of a resident super senior citizen (who is 80 years or more at any time during the previous year)

Assessment Year 2019-20

Taxable Income Tax Rate
Up to Rs. 5,00,000 Nil
Rs. 5,00,000 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

Add: Surcharge and Education Cess [see Note]

Assessment Year 2020-21

Taxable Income Tax Rate
Up to Rs. 5,00,000 Nil
Rs. 5,00,000 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

Add: Surcharge and Health & Education Cess [see Note]

Assessment Year 2019-20

a) Surcharge:

Surcharge is levied on the amount of income-tax at the following rates if total income of an assessee exceeds specified limits:

Nature of Income Range of income
Up to Rs. 50 lakh More than Rs. 50 lakh but up to Rs. 1 crore More than Rs. 1 crore
Any Income Nil 10% 15%

The surcharge shall be subject to marginal relief:

i) Where income exceeds Rs. 50 lakhs, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 50 lakhs by more than the amount of income that exceeds Rs. 50 lakhs.

ii) Where income exceeds Rs. 1 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.

b)  Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

c)  Rebate under Section 87A: The rebate is available to a resident individual if his total income does not exceed Rs. 3, 50,000. The amount of rebate shall be 100% of income-tax or Rs. 2,500, whichever is less.

Assessment Year 2020-21

a)  Surcharge:

Surcharge is levied on the amount of income-tax at following rates if the total income of an assessee exceeds specified limits:

Nature of Income Range of Total Income
Up to Rs. 50 lakh More than Rs. 50 lakh but up to Rs. 1 crore More than Rs. 1 crore but up to Rs. 2 crore More than Rs. 2 crore but up to Rs. 5 crore More than Rs. 5 crore but up to Rs. 10 crore More than Rs. 10 crore
Individual, HUF or Artificial Judicial Person
Short-term capital gain covered under Section 111A Nil 10% 15% 15% 15% 15%
Long-term capital gain covered under Section 112A Nil 10% 15% 15% 15% 15%
Any other income* Nil 10% 15% 25% 37% 37%
* The Finance (No. 2) Act, 2019 has been amended to withdraw the enhanced surcharge, i.e., 25% or 37%, as the case may be, from income chargeable to tax under section 111A and 112A. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%. However, where other income of a person does not exceed Rs. 2 crores but after including the incomes as referred to in section 111A and 112A, the total income exceeds Rs. 2 crores then irrespective of the amount of other income, surcharge shall be levied at the rate of 15% on the amount of tax payable on both normal income as well as income referred to in section 111A and 112A.

AOP or BOI

Short-term capital gain covered under Section 111A Nil 10% 15% 15% 15% 15%
Long-term capital gain covered under Section 112A Nil 10% 15% 15% 15% 15%
Short term or Long term capital gains on transfer of certain securities under section 115AD(1)(b) Nil 10% 15% 15% 15% 15%
Any other Income* Nil 10% 15% 25% 37% 37%
* The Finance (No. 2) Act, 2019 has been amended to withdraw the enhanced surcharge, i.e., 25% or 37%, as the case may be, from income chargeable to tax under section 111A, 112A and 115AD. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%. However, where other income of a person does not exceed Rs. 2 crores but after including the incomes as referred to in section 111A, 112A and 115AD, the total income exceeds Rs. 2 crores then irrespective of the amount of other income, surcharge shall be levied at the rate of 15% on the amount of tax payable on both normal income as well as income referred to in section 111A, 112A and 115AD.

The surcharge shall be subject to marginal relief:

i) Where income exceeds Rs. 50 lakhs, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 50 lakhs by more than the amount of income that exceeds Rs. 50 lakhs.

ii) where income exceeds Rs. 1 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

iii)  where income exceeds Rs. 2 crore, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 2 crore by more than the amount of income that exceeds Rs. 2 crore

iv) where income exceeds Rs. 5 crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 5 crore rupees by more than the amount of income that exceeds Rs. 5 crore rupees

b) Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of 4% of such income-tax and surcharge.

c) Rebate under Section 87A: The rebate is available to a resident individual if his total income does not exceed Rs. 5,00,000. The amount of rebate shall be 100% of income-tax or Rs. 12,500, whichever is less.

4. Partnership Firm

For the Assessment Year 2019-20 & 2020-21, a partnership firm (including LLP) is taxable at 30%.

Add:

a) Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).

b) Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge

5. Local Authority

For the Assessment Year 2019-20 & 2020-21, a local authority is taxable at 30%.

Add:

a)  Surcharge:The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).

b)  Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

6. Domestic Company

Income-tax rates applicable in case of companies for Assessment Year 2019-20 are as follows:

 Domestic Company  Assessment Year 2019-20
Where its total turnover or gross receipt during the previous year 2016-17 does not exceed Rs. 250 crore 25%
Where its total turnover or gross receipt during the previous year 2017-18 does not exceed Rs. 400 crore NA
Where it opted for Section 115BA 25%
Where it opted for Section 115BAA NA
Where it opted for Section 115BAB NA
Any other domestic company 30%

Add:

a)  Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 7% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 12% of such tax, where total income exceeds ten crore rupees. However, the rate of surcharge in case of a company opting for taxability under Section 115BAA or Section 115BAB shall be 10% irrespective of amount of total income.

The surcharge shall be subject to marginal relief, which shall be 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

b) Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

Income-tax rates applicable in case of companies for Assessment Year 2020-21 are as follows:

i. Option has been given to pay concessional effective tax @25.17% to existing domestic companies & @17.16% to new domestic manufacturing companies without availing any tax incentives/exemptions

SI No Nature of domestic company Current ETR(%) ETR if option
exercised
(%)
Conditions / benefits if
option exercised
1.

 

 

 

 

 

 

Existing Domestic Companies
  • Applicable w.e.f FY 2019-20
  • Not eligible for any tax incentives/exemptions
  • Not required to pay MAT
  • Option has to be exercised one time on or before the due date of filing of tax return
  • Option once exercised can’t be withdrawn.
a) Turnover > Rs.400 Crore during the FY 2017-18
Income ≤ Rs.1 crore 31.20% 25.17%#
Income > Rs.1 crore ≤ Rs.10 crore 33.38% 25.17%
Income > Rs.10 crore 34.94% 25.17%
b) Other domestic companies ( in existence on or before 30-Sep-2019)
Income ≤ Rs.1 crore 26% 25.17%
Income > Rs.1 crore ≤ Rs.10 crore 27.82% 25.17%
Income > Rs.10 crore 29.12% 25.17%
2. Existing Domestic Companies Continues to avail  tax
incentives/exemptions
  • Can opt for 25.17% effective tax rate after the expiry of tax holiday/exemption period
  • MAT rate reduced from 18.5% to 15% (plus applicable surcharge and cess)
3. New Domestic Manufacturing Companies incorporated on or after 01-Oct-2019
  • Applicable w.e.f FY 2019-20
  • Has to commence
    manufacturing on or before 31.03.2023
  • Not eligible for any tax
    incentives/exemptions
  • Not required to pay MAT
  • Option has to be exercised on or before the due date of filing of first tax return
  • Option once     exercised
    can’t be withdrawn
Income ≤ Rs.1 crore 26% 17.16%##
Income > Rs.1 crore ≤ Rs.10 crore 27.82% 17.16%
Income > Rs.10 crore 29.12% 17.16%

#. Corporate tax rate @22%, Surcharge @10% & Health & Education Cess@4%

##. Corporate tax rate @15%, Surcharge @10% & Health & Education Cess@4%

ii. Enhanced surcharge of 25%/37% shall not be applicable on tax payable on capital gains arising from transfer of certain securities

SI No Capital Asset Assessee Taxability
Section
Applicable
Surcharge
1.
  • Equity share in a company Liable
  • Units of equity oriented fund
  • Units of business trust        for STT
Individual,    HUF, AOP, BOI & AJP STCG- 111A LTCG- 112A 10% or 15%
2.
  • Any security including derivatives
Foreign Portfolio Investors (FPI) 115AD 10% or 15%

iii. Any business transaction between the company (opt for 17.61%) and any other person shall fall under specified domestic transaction (SDT) and transfer provisions will be applicable accordingly

iv. No tax on buy back of shares in the hands of listed companies announced buy-back of shares prior to 05-July-2019

7. Foreign Company

Assessment Year 2019-20 and Assessment Year 2020-21

Nature of Income Tax Rate
Royalty received from Government or an Indian concern in pursuance of an agreement made 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 after February 29, 1964 but before April 1, 1976 and where such agreement has, in either case, been approved by the Central Government 50%
Any other income 40%

Add:

a) Surcharge:The amount of income-tax shall be increased by a surcharge at the rate of 2% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 5% of such tax, where total income exceeds ten crore rupees. However, the surcharge shall be subject to marginal relief, which shall be as under:

(i) Where income exceeds one crore rupees but not exceeding ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

(ii) Where income exceeds ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.

b) Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

8. Co-operative Society

Assessment Year 2019-20 and Assessment Year 2020-21

Taxable income Tax Rate
Up to Rs. 10,000 10%
Rs. 10,000 to Rs. 20,000 20%
Above Rs. 20,000 30%

Add:

a) Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).

b) Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

More Under Income Tax

5 Comments

  1. Rahul Darji says:

    Correction required in Article – Section 87A

    The interim budget for FY 2019-20 has introduced full tax rebate under section 87A for individuals earning a net taxable income upto Rs. 5 lakhs which means the maximum tax rebate limit under section 87A has been increased to Rs.12,500 for the qualified taxpayers from Rs. 2,500. However, in case net taxable income of the taxpayer exceeds Rs. 5 lakh for AY 2020-21, the rebate under this section will be zero.

  2. Vijaykrishna M says:

    if an employee is retired with a salary ( Net taxable income Rs 11,52,000/, he is taxed Rs 158100 + surcharge
    he is also given a leave salary ( on account of superannuation retirement) Rs 8,52,000/ ,
    How his income tax is calculated ?

  3. CA Nisarg Khatri says:

    The Assessment years are mentioned AY 2020-19 at many places, why do you create such posts? Can’t you check or double check the article before publishing it on such public platforms?

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