In this Article we updates about the normal Income tax rates applicable to different types of taxpayers for Financial Year 2018-19 . The Income tax rates discussed in this part are applicable for assessment year 2019-20 i.e. financial year 2018-19. In this part you can gain knowledge about the normal Income Tax tax rates applicable to different taxpayers.  The tax rates discussed in this article are applicable for assessment year 2019-20 i.e. financial year 2018-19.

In this part you can gain knowledge about the normal tax rates applicable to different taxpayers. For special tax rates applicable to special incomes like long term capital gains, winnings from lottery, etc. refer “Tax Rates” under “Tax Charts & Tables”. The tax rates discussed in this part are applicable for assessment year 2019-20 i.e. financial year 2018-19.

Normal Income tax rates applicable to an individual for Financial Year 2018-19

The normal tax rates applicable to a resident individual will depend on the age of the individual. However, in case of a non-resident individual the tax rates will be same irrespective of his age. For the purpose of ascertainment of the applicable tax slab, an individual can be classified as follows:

  • Resident individual below the age of 60 years.
  • Resident individual of the age of 60 years or above at any time during the year but below the age of 80 years.
  • Resident individual of the age of 80 years or above at any time during the year.
  • Non-resident individual irrespective of the age.

Normal Income tax rates applicable to a resident individual below the age of 60 years for Financial Year 2018-19 i.e. born on or after 1.4.1958

Net income range Income-tax rates Health and
Education Cess
Up to Rs. 2,50,000 Nil Nil
Rs. 2,50,000 – Rs. 5,00,000 5% of (total income minus Rs. 2,50,000) [*] 4% of income tax
Rs. 5,00,000 – Rs. 10,00,000 Rs. 12,500 + 20% of (total income minus Rs. 5,00,000) 4% of income tax
Above Rs. 10,00,000 Rs. 1,12,500 + 30% of (total income minus Rs. 10,00,000) 4% of income tax

Surcharge: Surcharge is levied @ 10% on the amount of income-tax if net income exceeds Rs 50 Lakh but doesn’t exceed Rs. 1 crore and @ 15% on the amount of income tax if net income exceeds Rs. 1 crore. In a case where surcharge is levied, health and education cess of 4% will be levied on the amount of income tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.

Further, in a case where net income exceeds Rs. 1 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and 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.

AMT : In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+HEC) of “adjusted total income” computed as per section 115JC. For provisions relating to AMT refer tutorial on “MAT/AMT” in tutorial section.

However, w.e.f. Assessment Year 2019-20, In case of a unit located in an IFSC which derives its income solely in convertible foreign exchange, the rate of AMT under section 115JF shall be at the rate of 9% instead of existing rate of 18.50%.

[*] A resident individual (whose net income does not exceed Rs. 3,50,000) can avail rebate under section 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 per cent of income-tax or Rs. 2,500, whichever is less.

Normal Income tax rates applicable to a resident individual of the age of 60 years or above for Financial Year 2018-19 at any time during the year but below the age of 80 years

Net income range Income-tax rates Health and Education

Cess

Up to Rs. 3,00,000 Nil Nil
Rs. 3,00,000 – Rs. 5,00,000 5% of (total income minus Rs. 3,00,000) [*] 4% of income-tax
Rs. 5,00,000 – Rs. 10,00,000 Rs. 10,000 + 20% of (total income minus Rs. 5,00,000) 4% of income-tax
Above Rs. 10,00,000 Rs. 1,10,000 + 30% of (total income minus Rs. 10,00,000) 4% of income-tax

Surcharge: Surcharge is levied @ 10% on the amount of income-tax if net income exceeds Rs 50 Lakh but doesn’t exceed Rs. 1 crore and @ 15% on the amount of income tax if net income exceeds Rs. 1 crore. In a case where surcharge is levied, health and education cess of 4% will be levied on the amount of income tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.

Further, in a case where net income exceeds Rs. 1 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and 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.

AMT: In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+HEC) of “adjusted total income” computed as per section 115JC. For provisions relating to AMT refer tutorial on “MAT/AMT” in tutorial section.

However, w.e.f. Assessment Year 2019-20, In case of a unit located in an IFSC which derives its income solely in convertible foreign exchange, the rate of AMT under section 115JF shall be at the rate of 9% instead of existing rate of 18.50%.

[*] A resident individual (whose net income does not exceed Rs. 3,50,000) can avail rebate under section 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 per cent of income-tax or Rs. 2,500, whichever is less.

Normal Income Tax rates applicable to a resident individual of the age of 80 years or above for Financial Year 2018-19 at any time during the year

Net income range Income-tax rates Health and Education Cess
Up to Rs. 5,00,000 Nil Nil
Rs. 5,00,000 – Rs. 10,00,000 20%  of (total       income   minus     Rs. 5,00,000) 4% of income-tax
Above Rs. 10,00,000 Rs. 1,00,000 + 30% of (total income minus Rs. 10,00,000) 4% of income-tax

Surcharge: Surcharge is levied @ 10% on the amount of income-tax if net income exceeds Rs 50 Lakh but doesn’t exceed Rs. 1 crore and @ 15% on the amount of income tax if net income exceeds Rs. 1 crore. In a case where surcharge is levied, health and education cess of 4% will be levied on the amount of income tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.

Further, in a case where net income exceeds Rs. 1 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and 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.

AMT : In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+HEC) of “adjusted total income” computed as per section 115JC. For provisions relating to AMT refer tutorial on “MAT/AMT” in tutorial section.

However, w.e.f. Assessment Year 2019-20, In case of a unit located in an IFSC which derives its income solely in convertible foreign exchange, the rate of AMT under section 115JF shall be at the rate of 9% instead of existing rate of 18.50%.

Income Tax Rate applicable to Non-resident individual irrespective of age for Financial Year 2018-19

Net income range Income-tax rates Health and
Education Cess
Up to Rs. 2,50,000 Nil Nil
Rs. 2,50,000 – Rs. 5,00,000 5%   of (total      income    minus    Rs. 2,00,000) [*] 4% of income-tax
Rs. 5,00,000 – Rs. 10,00,000 Rs. 12,500 + 20% of (total income minus Rs. 5,00,000) 4% of income-tax
Above Rs. 10,00,000 Rs. 1,12,500 + 30% of (total income minus Rs. 10,00,000) 4% of income-tax

Surcharge: Surcharge is levied @ 10% on the amount of income-tax if net income exceeds Rs 50 Lakh but doesn’t exceed Rs. 1 crore and @ 15% on the amount of income tax if net income exceeds Rs. 1 crore. In a case where surcharge is levied, health and education cess of 4% will be levied on the amount of income tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.

Further, in a case where net income exceeds Rs. 1 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and 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.

AMT : In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+HEC) of “adjusted total income” computed as per section 115JC. For provisions relating to AMT refer tutorial on “MAT/AMT” in tutorial section.

However, w.e.f. Assessment Year 2019-20, In case of a unit located in an IFSC which derives its income solely in convertible foreign exchange, the rate of AMT under section 115JF shall be at the rate of 9% instead of existing rate of 18.50%.

[*] Rebate under section 87A is available only to a resident individual (whose net income does not exceed Rs. 3,50,000), thus, no rebate is available to a non-resident individual.

Normal Income tax rate applicable to resident/non-resident Hindu Undivided Family (HUF) for Financial Year 2018-19

Net income range Income-tax rates Health and Education Cess
Up to Rs. 2,50,000 Nil Nil
Rs. 2,50,000 – Rs. 5,00,000 5%  of (total income minus Rs. 2,50,000) 4% of income-tax
Rs. 5,00,000 – Rs. 10,00,000 Rs. 12,500 + 20% of (total income minus Rs. 5,00,000) 4% of income-tax
Above Rs. 10,00,000 Rs. 1,12,500 + 30% of (total income minus Rs. 10,00,000) 4% of income-tax

Surcharge: Surcharge is levied @ 10% on the amount of income-tax if net income exceeds Rs 50

Lakh but doesn’t exceed Rs. 1 crore and @ 15% on the amount of income tax if net income exceeds Rs. 1 crore. In a case where surcharge is levied, health and education cess of 4% will be levied on the amount of income tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.

Further, in a case where net income exceeds Rs. 1 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and 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.

AMT : In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+HEC) of “adjusted total income” as per section 115JC. For provisions relating to AMT refer tutorial on “MAT/AMT” in tutorial section.

However, w.e.f. Assessment Year 2019-20, In case of a unit located in an IFSC which derives its income solely in convertible foreign exchange, the rate of AMT under section 115JF shall be at the rate of 9% instead of existing rate of 18.50%.

Normal Income tax rates applicable to every AOP/BOI/Artificial juridical person for Financial Year 2018-19

Net income range Income-tax rates Health and Education Cess
Up to Rs. 2,50,000 Nil Nil
Rs. 2,50,000 – Rs. 5,00,000 5% of (total income minus Rs. 2,50,000) 4% of income-tax
Rs. 5,00,000 – Rs. 10,00,000 Rs. 12,500 + 20% of (total income minus Rs. 5,00,000) 4% of income-tax
Above Rs. 10,00,000 Rs. 1,12,500 + 30% of (total income minus Rs. 10,00,000) 4% of income-tax

Surcharge: Surcharge is levied @ 10% on the amount of income-tax if net income exceeds Rs 50 Lakh but doesn’t exceed Rs. 1 crore and @ 15% on the amount of income tax if net income exceeds Rs. 1 crore. In a case where surcharge is levied, health and education cass of 4% will be levied on the amount of income tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.

Further, in a case where net income exceeds Rs. 1 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and 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.

AMT : In the case of a non-corporate taxpayers to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+HEC) of “adjusted total income” computed as per section 115JC. For provisions relating to AMT refer tutorial on “MAT/AMT” in tutorial section.

However, w.e.f. Assessment Year 2019-20, In case of a unit located in an IFSC which derives its income solely in convertible foreign exchange, the rate of AMT under section 115JF shall be at the rate of 9% instead of existing rate of 18.50%.

Normal Income tax rates applicable to a firm for Financial Year 2018-19

A firm is taxed at a flat rate of 30%. Apart from tax @ 30%, Health and Education Cess is levied @ 4% of income-tax.

Surcharge : Surcharge is levied @ 12% on the amount of income-tax where net income exceeds Rs. 1 crore. In a case where surcharge is levied, health and education cess of 4% will be levied on the amount of income-tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case of a person having a net income of exceeding Rs. 1 crore, the amount payable as income tax and 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.

AMT : In the case of a non-corporate taxpayers to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+SC+HEC) of “adjusted total income” computed as per section 115JC. For provisions relating to AMT refer tutorial on “MAT/AMT” in tutorial section.

Normal Income Tax rates applicable to a domestic company for Financial Year 2018-19

A domestic company is taxed at a flat rate of 30%. However, tax rate is 25% where turnover or the gross receipt of the company in the previous year 2016-17 doesn’t exceed Rs. 250 crore. Apart from tax @ 30% or 25%, as the case may be, Health and Education Cess is levied @ 4% of income-tax.

Surcharge : In addition to tax at above rate, surcharge is levied @ 7% on the amount of income-tax if net income exceeds Rs. 1 crore but does not exceed Rs. 10 crore and @ 12% on the amount of income-tax if net income exceeds Rs. 10 crore. In a case where surcharge is levied, health and education cess of 4% will be levied on the amount of income-tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case of a company whose net income exceeds Rs. 1 crore but does not exceed Rs. 10 crore, the amount payable as income-tax and 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.

In case of a domestic company whose net income exceeds Rs. 10 crore, marginal relief is available from surcharge in such a manner that the amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax and surcharge on total income of Rs. 10 crore by more than the amount of income that exceeds Rs. 10 crore.

MAT : In the case of a corporate taxpayer to whom the provisions of Minimum Alternate Tax (MAT) applies, tax payable cannot be less than 18.5% (+HEC) of “Book profit” computed as per section 115JB. However, MAT is levied at the rate of 9% (plus surcharge and cess as applicable) in case of a company, being a unit of an International Financial Services Centre and deriving its income solely in convertible foreign exchange. For provisions relating to MAT refer tutorial on “MAT/AMT” in tutorial section.

Normal Income tax rates applicable to a foreign company for Financial Year 2018-19

A foreign company is taxed at a flat rate of 40%. Apart from tax @ 40%, Health and Education Cess is levied @ 4% of income-tax.

Surcharge : In addition to tax at above rate, surcharge is levied @ 2% on the amount of income-tax if net income exceeds Rs. 1 crore but does not exceed Rs. 10 crore and @ 5% on the amount of income-tax if net income exceeds Rs. 10 crore. In a case where surcharge is levied, health and education cess of 4% will be levied on the amount of income-tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case of a foreign company whose net income exceeds Rs. 1 crore but does not exceed Rs. 10 crore the amount payable as income-tax and 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.

In case of a foreign company whose net income exceeds Rs. 10 crore, marginal relief is available from surcharge in such a manner that the amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax and surcharge on total income of Rs. 10 crore by more than the amount of income that exceeds Rs. 10 crore.

MAT : In the case of a corporate taxpayer to whom the provisions of Minimum Alternate Tax (MAT) applies, tax payable cannot be less than 18.5% (+HEC) of “Book profit” as per section 115JB. However, as per Explanation 4 to section 115JB as amended by Finance Act, 2016 with retrospective effect from 1/4/2001, it is clarified that the MAT provisions shall not be applicable and shall be deemed never to have been applicable to an assessee, being a foreign company, if— (i) the assessee is a resident of a country or a specified territory with which India has an agreement referred to in sub-section (1) of section 90 or the Central Government has adopted any agreement under sub-section (1) of section 90A and the assessee does not have a permanent establishment in India in accordance with the provisions of such agreement; or [As amended by Finance Act, 2016] (ii) the assessee is a resident of a country with which India does not have an agreement of the nature referred to in clause (i) and the assessee is not required to seek registration under any law for the time being in force relating to companies. For provisions relating to MAT refer tutorial on “MAT/AMT” in tutorial section.

Normal Income tax rates applicable to a Co-operative societies for Financial Year 2018-19

Net income range Rate of income-tax
Up to Rs. 10,000 10%
Rs. 10,000 – Rs. 20,000 20%
Above Rs. 20,000 30%

Apart from tax at above rate, Health and Education Cess is levied @ 4% of income-tax.

Surcharge : Surcharge is levied @ 12% on the amount of income-tax where net income exceeds Rs. 1 crore. In a case where surcharge is levied, HEC of 4% will be levied on the amount of income-tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case of a person having a net income exceeding Rs. 1 crore, the amount payable as income tax and 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.

AMT : In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+SC+HEC) of “adjusted total income” computed as per section 115JC. For provisions relating to AMT refer tutorial on “MAT/AMT” in tutorial section.

Normal Income tax rates applicable to local authorities for Financial Year 2018-19

A local authority is taxed at a flat rate of 30%. Apart from tax @ 30%, Health and Education Cess is levied @ 4% of income-tax.

Surcharge : Surcharge is levied @ 12% on the amount of income-tax where net income exceeds Rs. 1 crore. In a case where surcharge is levied, HEC of 4% will be levied on the amount of income-tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case of a person having net income exceeding Rs. 1 crore, the amount payable as income tax and 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.

AMT : In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+SC+HEC) of “adjusted total income” computed as per section 115JC. For provisions relating to AMT refer tutorial on “MAT/AMT” in tutorial section.

However, w.e.f. Assessment Year 2019-20, In case of a unit located in an IFSC which derives its income solely in convertible foreign exchange, the rate of AMT under section 115JF shall be at the rate of 9% instead of existing rate of 18.50%.

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14 responses to “Income Tax Rates for Financial Year 2018-19”

  1. Radhakrishnan.V says:

    Sir,
    Greetings to you. I desire a clarification.Will you please clarify.
    I want to submit my IT Returns for FY 2017-18 (A.Y 2018-19 )
    In the recent budget standard deduction of Rs.40000.00 is allowed for salary class and pensioners and from interest income an amount upto 50000.00 can be deducted.
    Kindly clarify whether this provision is applicable for FY 2017-18 income to be assessed 2018-19 or it is applicable for income in FY 2018-19
    V.Radhakrishnan

  2. Chandrashekhar Pal says:

    Dear Sir

  3. benjack says:

    Requesting clarification for the question raised by an employee;

    I have submitted a ‘ No PAN’ declaration from landlord wherein the landlord signed that he /she does not have any taxable income and hence have no PAN.
    I submitted rental agreement along with rental receipts also.
    But my company doesn’t accept those as stating the reason ” Staff who had paid rent in excess of Rs.1 lakh per annum have not submitted PAN of the landlord. It is mandatory for the employer to obtain PAN of the landlord for granting HRA exemption to staff”. And revoked my HRA exemption claim.
    Please advise whether this decision from the company is right or wrong?.
    Please support.

  4. Kamal says:

    Premium paid with Gst.of lic legible for deduction 80c or not. please tell

  5. I. Tripathi. says:

    Whether Concurrent Charge Allowance is taxable income.
    Whether any benifits/ exemption/deduction is available for individual having mentally chellenged child ?

  6. I. Tripathi. says:

    Whether Concurrent Charge Allowance is taxable income.

  7. yashpal says:

    the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs. please tell me means of this.

  8. yashpal says:

    Thanku. please provide marginal relief means and calculation of surcharge for more then 50 lakh and 1crore income through e.g.

  9. Puspendu says:

    This is wrong, the rates is for FY 2017-18

  10. B J BAJAJ says:

    Interest on Investment in fixed deposits in psu banks are deductible to the extent of Rs. 1,,00,000/- for PY2016-17 (AY 2017-18) : Please confirm.

    THANKS

  11. keshav patil says:

    Sir,
    Recently I sold my vehicle (Tipper) so got 600000 by cheque. I used the money for paying my ‘finance loan of tipper’ by using those money.
    Now will pay income tax for that amount (Rs 600000) ?
    Will it is called the income?

  12. RAVI SV says:

    Dear sir, i am aged 60 years + and recently resigned from a pvt company on 31st,July’1956 ( which is my date of birth also).
    I am offered SA ( Super annuation) of Rs 9.0 lakhs thru LIC and asked to give the declaration whether i require 30% as withdrawal and balance as pension
    or 100% as with drawl., am already in 30% tax slab this year.

    if i with draw 100% this year, will it attract income tax, please clarify.
    Regards,
    Ravi SV

  13. K E B Rangarajan, Retd AddlCIT says:

    As per recent clarification, For Senior citizens .i.e. 60 yrs age must be born on or before 1-4-1957 and and for 80 years born on or before 1-4-37
    and not
    Resident individual of the age of 60 years or above at any time during the year but below the age of 80 years. (i.e. born during 1-4-1937 to 31-3-1957) Resident individual of the age of 80 years or above at any time during the year. i.e. born before 1.4.1937 –

  14. Madan Arora says:

    Excellent knowledge. One request is to get the informatio with regard to reatment of NSC interest.

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