Under existing rules of the Income Tax Act, 1961, resident Indian , non-resident Indians (NRIs) , HUF and AOP are taxed according to following tax slabs and rates. The following are the IT slabs and slab rates for FY 2019-2020.
1. 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 2020-21
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 2020-21
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 2020-21
Add: Surcharge and Health & Education Cess [see Note]
Note:
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:
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%.
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.
b) Health and Education Cess: 4% of income tax plus surcharge.
5. Local Authority
For the Assessment Year 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.
b) Health and Education Cess: 4% of income tax plus surcharge.
6. Domestic Company
Income-tax rates applicable in case of companies for Assessment Year 2020-21 are as follows:
Add:
a) Surcharge:
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.
What are the new sections and what do they cover?
- Section 115BAA and Section 115BAB are newly introduced sections covering the changes in corporate tax rates as per the Ordinance.
- Section 115BAA allows all domestic companies the option to switch to a tax rate of 22% (plus surcharge and cess) subject to certain conditions. The option can be exercise any time, starting with FY 2019-20; however, once it is exercised, the company cannot go back to the previous tax rates and conditions.
- Section 115BAB allows domestic manufacturing companies incorporated after 1 October 2019 to switch to a tax rate of 15% (plus surcharge and cess) subject to certain conditions. The company is eligible only if it commences production prior to 31 March 2023. The option can be exercise any time, starting with FY 2019-20; however, once it is exercised, the company cannot go back to the previous tax rates and conditions.
b) Health and Education Cess: 4% of income tax plus surcharge.
7. Foreign Company
Assessment Year 2020-21
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.
b) Health and Education Cess: 4% of income tax plus surcharge.
8. Co-operative Society
Assessment Year 2019-20 and Assessment Year 2020-21
Add:
Surcharge:- 12% of tax where total income exceeds Rs. 1 crore.
Health and Education cess: 4% of income tax plus surcharge.
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