Income tax slab rates in India – AY 2020-21 (FY 2019-20)

Income tax slab rates are decided and governed by Income Tax Act 1961 and are subject to change every year. Here are the income tax slab rates for the Financial Year 2019-20 (relevant to Assessment Year 2020-21) for Resident Individual (Below 60 Years Old), HUF and AOP/BOI/Artificial juridical person, Senior Citizens (60 Years Or More but Less than 80 Years), Senior Citizens (80 Years Or More), Domestic Companies, Foreign Companies, Partnership Firm/ LLP/ Local Authorities and Co-operative societies:

♦ Income Tax Slab for Resident Individual (Below 60 Years Old), HUF and AOP/BOI/Artificial juridical person

Surcharge: 10% of income tax, where total income exceeds INR 50 lakh up to INR 1 crore. 15% of income tax, where the total income exceeds INR 1 crore up to INR 2 crore. 25% of income tax, where total income exceeds Rs 2 crore upto Rs 5 crore and 37% of income tax, where total income exceeds Rs 5 crore.

Health and Education Cess: 4% of Income Tax plus Surcharge. (Refer Note 1)

*This exemption limit will be applicable for non-resident individual also Irrespective of their age

♦ Income Tax Slab for Senior Citizens (60 Years Or More but Less than 80 Years)

Surcharge: 10% of income tax, where total income exceeds INR 50 lakh up to INR 1 crore. 15% of income tax, where the total income exceeds INR 1 crore up to INR 2 crore. 25% of income tax, where total income exceeds Rs 2 crore upto Rs 5 crore and 37% of income tax, where total income exceeds Rs 5 crore.

Health and Education Cess: 4% of Income Tax plus Surcharge. (Refer Note 1)

♦ Income Tax Slab for Senior Citizens (80 Years Or More)

Surcharge: 10% of income tax, where total income exceeds INR 50 lakh up to INR 1 crore. 15% of income tax, where the total income exceeds INR 1 crore up to INR 2 crore. 25% of income tax, where total income exceeds Rs 2 crore upto Rs 5 crore and 37% of income tax, where total income exceeds Rs 5 crore.

Health and Education Cess: 4% of Income Tax plus Surcharge (Refer Note 1)

Note 1: Rebate U/s. 87A

Assessee being a resident individual in India, whose total income after claiming deduction under chapter VI A does not exceed Rs. 5,00,000 shall be entitled to the rebate under section 87A of an amount equal to hundred per cent of such income-tax or an amount of Rs. 12,500, whichever is less. further, please note that this rebate is applied to the total tax before adding the Education Cess (4%).

♦ Income Tax Slab for Domestic Companies

As per the Taxation Laws (Amendment) Bill, 2019, the amended slab rates for companies are as under:

A. For All Existing Domestic Companies [As per section 115BA]:

Surcharge: 7% of taxable income if net income exceed 1 crore but does not exceed 10 crore and 12% of taxable income if net income exceed 10 crore.

Health and Education Cess: 4% of Income Tax Plus Surcharge

B. For All Existing Domestic Companies (irrespective of its date of incorporation or nature of activity) [As per section 115BAA]

Income Tax Rate: 22% (Subject to Note 1)

Surcharge: 10% of taxable income if net income exceed 1 crore.

Health and Education Cess: 4% of Income Tax Plus Surcharge

Note:

1) Following conditions need to be satisfied for getting benefit of lower tax rate introduced by Section 115BAA:

a. without claiming exemption/ deduction

• • u/s 10AA [SEZ units],
  • u/s 32(1)(iia) [additional depreciation qua new plant and machinery @ 20%/ 30%],
  • u/s 32AD [15% on new assets in undertaking set up in specified backward areas in Andhra Pradesh, Bihar, Telangana, and West Bengal]
  • u/s 33AB [specified percentage of amounts deposited with Tea/ Coffee/ Rubber Board]
  • u/s 33ABA [specified percentage of amounts deposited in Site Restoration Account]
  • u/s 35(1)(ii)/(iia), 35(2AA) [specified deduction for scientific research]
  • u/s 35AD [expenditure on specified business]
  • u/s 35CCC [expenditure on agricultural extension project]
  • u/s 35CCD [expenditure on skill development project]
  • under Part C of Chapter VIA except section 80JJAA of the Act (such as 80IA/IB/IC/ID/IE etc.)

b. Without set-off of any brought forward losses to the extent such loss relates to deductions mentioned above. Such losses would also not be allowed to be carried forward to subsequent years.

c. After claiming depreciation other than additional depreciation u/s 32(1)(iia).

Benefit of lower rate under the aforesaid section can be exercised by the company from any year commencing from AY 2020-21 or onwards. Such option is to be exercised in prescribed manner, before due date of return u/s 139(1) for the year in which option is exercised. Option once exercised would be binding for subsequent years and cannot be withdrawn.

2) Companies availing benefit of lower tax rate under new provisions of sections 115BAA have been Exempted from MAT on book profit under section 115JB

C) For all new manufacturing domestic companies [As per section 115BAB]

Income Tax Rate: 15% (Subject to Note 1)

Surcharge: 10% of taxable income if net income exceed 1 crore.

Health and Education Cess: 4% of Income Tax Plus Surcharge

Note:

1. Following conditions need to be satisfied for getting benefit of lower tax rate introduced by Section 115BAB:

a) If such company is set-up and registered, on or after 1st October,2019 and commences manufacturing activity upto 31st March, 2023.

b) Akin to the provisions of section 115BAA, income for the purposes of the aforesaid preferential rate has to be computed without claiming exemptions / deductions, set-off of brought forward losses, as prescribed in that section and discussed above.

c) Additionally, following conditions must be fulfilled by the company to avail benefit of lower tax rate:

• • company must not be formed by splitting up, or the reconstruction of a business already in existence;
  • company must not use machinery or plant previously used for any purpose. Used plant and machinery to the extent of 20% of total value of plant and machinery is permissible;
  • company must not use building previously used as a hotel or a convention Centre.

d) Akin to provisions of section 115BAA, if company opts for lower rate of tax given under this section, it shall not be able to subsequently withdraw the option.

2. Companies availing benefit of lower tax rate under new provisions of sections 115BAB have been Exempted from MAT on book profit under section 115JB

♦ Income Tax Slab for Foreign Companies

Surcharge: 2% of taxable income if net income exceed 1 crore but does not exceed 10 crore and 5% of taxable income if net income exceed 10 crore.

Health and Education Cess: 4% of Income Tax plus Surcharge.

♦ Income Tax Slab for Partnership Firm/ LLP/ Local Authorities

Income Tax Rate: 30%

Surcharge: 12% of taxable income if net income exceed 1 crore.

Health and Education Cess: 4% of Income Tax Plus Surcharge

♦ Income Tax Slab for Co-operative societies:

Surcharge: 12% of taxable income if net income exceed 1 crore.

Health and Education Cess: 4% of Income Tax Plus Surcharge