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Income Tax Slab 2020-21

Check the New Income Tax Slab Rates for FY 2020-21 (AY 2021-22) and New Tax Regime.

#Income-Tax
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Nirmala Sitharaman, the Finance Minister of India presented the Union Budget, 2020 on 1st February, 2020 and introduced new income tax slab. The new tax regime was introduced for regular individuals, senior citizens and HUF, wherein they can pay taxes at lower income tax slab rates. Let’s check the income tax slab 2020 under old as well as new tax regime.

New Income Tax Slab for FY 2020-21 & AY 2021-22

Let’s check the new income tax slab rates 2020 for individuals below:

Annual Income

New Tax Regime

Old Tax Regime

Up to Rs。2。5 lakh

Exempt

Exempt

Rs。2。5 lakh - Rs。5 lakh

5%*

5%*

Rs.5 lakh - Rs.7.5 lakh

10%

20%

安徽快3Rs.7.5 lakh - Rs.10 lakh

15%

20%

Rs.10 lakh - Rs.12.5 lakh

20%

30%

Rs.12.5 lakh - Rs.15 lakh

25%

30%

Above Rs.15 lakh

30%

30%

 

New Income Tax Slab for Senior Citizens in 2020-21

Tax payers above 60 years of age and less than 80 years of age are considered as Senior Citizens as per the Income Tax Act, 1961. Let’s check the income tax slab for senior citizen as per the old tax regime.

Annual Income

Old Tax Regime

Up to Rs。3 lakh

Exempt

Rs.3 lakh - Rs.5 lakh

5%

安徽快3Rs。5 lakh - Rs。10 lakh

20%

Above Rs。10 lakh

30%


Note:
安徽快3 The income tax slab rates under the new tax regime is applicable to all the individuals and senior citizens. There is no exception available to senior citizens in the income tax slab 2020 under the new tax regime.

Income Tax Slab 2020-21 for Super Senior Citizens

安徽快3As per the Income Tax Act, 1961, tax payers above 80 years of age are super senior citizens。 Super senior citizens will be required to pay taxes as per the income tax slab FY 2020-21 & AY 2021-22 (old tax regime) which is mentioned below:

Annual Income

Old Tax Regime

Up to Rs.5 lakh

Exempt

Rs.5 lakh - Rs.10 lakh

20%

Above Rs.10 lakh

30%


Note:
Super senior citizens can also opt for the Income tax slab 2020 under the new tax regime. The Income tax slab rates 2020-21 are same for all tax payers (individuals, senior citizens and super senior citizens).

Also Read: Income Tax Rate for FY 2019-20

Surcharge on Income Tax for Individuals & Senior Citizens

Surcharge is levied on income tax amount if the total income of the assessee exceed a specified income limit. Let’s check the surcharge on income tax for FY 2020-21.

Current Surcharge Rates 2020-21
 

Income

Surcharge Rate

Less than Rs。50 lakh

NIL

Rs.50 lakh – Rs.1crore

10%

Rs.1 crore – Rs.2 crore

15%

Rs.2 crore – Rs.5 crore

25%

Rs。5 crore – Rs。10 crore

37%

More than Rs.10 crore

37%


Note:
 25% and 37% surcharge on income tax is not levied from taxable income under Section 111A, 112A and 115AD of the Income Tax Act, 1961. In such a case, the surcharge on income tax is 15%. However, there is marginal relief available in certain cases on surcharge of income tax.

Income Tax Slab 2020 For HUF

As per the Union Budget 2020, individuals and HUF can choose either old or new tax regime for the income tax calculation for the FY 2020-21。 The Income Tax Slab for FY 2020-21 & AY 2021-22 for HUF is as follows:

Annual Income

New Tax Regime

Old Tax Regime

Up to Rs。2。5 lakh

Exempt

Exempt

Rs。2。5 lakh - Rs。5 lakh

5%

5%

Rs.5 lakh - Rs.7.5 lakh

10%

20%

安徽快3Rs.7.5 lakh - Rs.10 lakh

15%

20%

Rs。10 lakh - Rs。12。5 lakh

20%

30%

Rs.12.5 lakh - Rs.15 lakh

25%

30%

Above Rs。15 lakh

30%

30%

 

New Income Tax Slab 2020 for Domestic Company

安徽快3Income tax slab 2020-21 for domestic company is fixed at a flat rate of 30%. Check the income tax slab for AY 2020-21 & 2021-22 applicable on domestic company below:

Domestic Company

AY 2020-21

AY 2021-22

Total Turnover / Gross Receipt for FY 2017-18 up to Rs.400 crore

25%

NA

Total Turnover / Gross Receipt for FY 2018-19 up to Rs.400 crore

NA

25%

Any other domestic company

30%

30%


Also Read:
 What is TDS

A domestic company can opt for special income tax rate for assessment year 2020-21 & 2021-22。 Following are the special income tax rate for domestic company:

Domestic Company

AY 2020-21

AY 2021-22

Opted for Section 115BA

25%

25%

Opted for Section 115BAA

22%

22%

Opted for Section 115BAB

15%

15%


Surcharge on Income Tax for Domestic Company

Surcharge on income tax for domestic company is levied at 7% of the income tax amount if the taxable income is more than Rs.1 crore and up to Rs.10 crore. The surcharge rate is 12% of such income tax if the taxable income is more than Rs.10 crore. However, there is a marginal relief available on surcharge on income tax in certain cases. Surcharge rate for companies choosing taxability under Section 115BAA, Section 115BAB is 10% irrespective of the total taxable income.

Income Tax Slab 2020-21 for Partnership Firm

Income tax slab rates for partnership firm is fixed at a flat rate of 30% for the financial year 2020-21.

Surcharge on Income Tax for Partnership Firm

Surcharge on Income Tax for Partnership Firm is 12% of tax where the total taxable income is more than Rs.1 crore. However, surcharge on income tax for partnership is subject to marginal relief in certain cases.

Income Tax Slab Comparison for FY 2019-20 vs FY 2018-19

For Individuals:
 

Income Range

Income Tax Slab FY 2019-20, AY 2020-21

Income Tax Slab FY 2018-19, AY 2019-20

Up to Rs。2,50,000

-

-

Rs.2,50,000 – Rs.5,00,000

5%

5%

Rs.5,00,000 – Rs.10,00,000

20%

20%

Above Rs.10,00,000

30%

30%


For Senior Citizens:
 

Income Range

Income Tax Slab FY 2019-20, AY 2020-21

Income Tax Slab FY 2018-19, AY 2019-20

安徽快3Up to Rs.3,00,000

-

-

Rs。3,00,000 – Rs。5,00,000

5%

5%

Rs.5,00,000 – Rs.10,00,000

20%

20%

Above Rs.10,00,000

30%

30%


For Super Senior Citizen
 

Income Range

Income Tax Slab FY 2019-20, AY 2020-21

Income Tax Slab FY 2018-19, AY 2019-20

Up to Rs.5,00,000

-

-

安徽快3Rs。5,00,000 – Rs。10,00,000

20%

20%

Above Rs。10,00,000

30%

30%

 

What is New Tax Regime?

The Finance Minister introduced a new tax regime for individual & HUF taxpayers under Section 115BAC of the Income Tax Act, 1961. Under the new tax regime, you can opt for concessional income tax rates. But, you will not be able to avail 70 deductions in the new tax regime. [2] The new tax regime was introduced to simplify the income tax law wherein the new income tax rate will be reduced for taxpayers who forgo some of the deductions and exemptions available as per Income Tax Act, 1961.

Income Tax Slab 2020-21 Max Life Insurance

What is New Tax Regime?

The Finance Minister introduced a new tax regime for individual & HUF taxpayers under Section 115BAC of the Income Tax Act, 1961. Under the new tax regime, you can opt for concessional income tax rates. But, you will not be able to avail 70 deductions in the new tax regime. [2] The new tax regime was introduced to simplify the income tax law wherein the new income tax rate will be reduced for taxpayers who forgo some of the deductions and exemptions available as per Income Tax Act, 1961.Income Tax Slab 2020-21 Max Life Insurance

List of Deductions not available in New Tax Regime

Individuals who opt for the income tax slab 2020 under the new tax regime will not be able to avail some of the popular deductions and exemptions under the Income Tax Act, 1961. Following are some of the deductions and exemptions out of 70 deductions [2] that you will need to forgo under the new tax regime: [3]

*Except Section 80CCD (2) and 80JJAA

Old Tax Regime vs. New Tax Regime – Which is Better?

As there are 2 tax regime available in financial year 2020-21, it becomes essential for you to check which one you should opt to reduce the income tax burden。 However, if you want to avail new income tax slab 2020 under the new tax regime, you cannot claim up to 70 deductions while calculating your income tax for financial year 2020-21。 Let’s take some examples to understand which one is better – old tax regime or the new tax regime under different salary brackets。

Case 1 – Taxable Income Less than Rs.10 lakh

Sneha, a 26-year-old is working with a startup company earning Rs.7 lakh per annum. If she makes investments under Section 80C of Rs.1.5 lakh and assuming pays health insurance premium of Rs.10,000 which he can avail under Section 80D of Income Tax Act, 1961. Let’s check the income tax rate 2020 and payable tax amount for FY 2020-21 (AY 2021-22) under the old tax regime vs new tax regime:
 

Particulars

New Tax Regime (in Rs.)

Old Tax Regime (in Rs.)

Gross Total Income

7,00,000

7,00,000

Less: Section 80C Deductions

-

(1,50,000)

Less: Section 80D Deductions

-

(10,000)

Less: Standard Deduction

-

(50,000)

Taxable Income

安徽快3Rs。7,00,000

Rs.4,90,000

Tax Payable as per the Income Tax Slab 2020-21

Up to Rs.2.5 lakh

0

0

Rs。2。5 lakh – Rs。5 lakh

12,500

12,000

Rs. 5 lakh – Rs.7.5 lakh

20,000

-

Total

32,500

12,000

Less: Rebate u/s 87A*

-

安徽快312,000

Add: Health & Education Cess (4%)

1300

-

Net Tax Payable

33,800

NIL


安徽快3 *Rebate u/s 87A of the Income Tax Act, 1961 is of Rs.12500 or Actual tax payable, whichever is less. This is applicable only to the individuals with taxable income up to Rs.5 lakh per annum.

Case 2 – Taxable Income Between Rs.10 lakh to Rs.15 lakh

Kartik, a 30-year-old individual is working with a company. He earns a total income of Rs.12,00,000. He is planning to make investments under Section 80C of Rs.1.5 lakh and investments in National Pension System under Section 80CCD of Rs.50,000. He also has a medical insurance for which he is supposed to pay Rs. 20,000 as his premium which he can avail as a deduction under Section 80D of Income Tax Act, 1961. Let’s check the income tax payable for FY 2020-21 (AY 2021-22) under the old tax regime vs new tax regime:
 

Particulars

New Tax Regime (in Rs.)

Old Tax Regime (in Rs.)

Gross Total Income

12,00,000

12,00,000

Less: Section 80C Deductions

-

(1,50,000)

Less: Section 80CCD Deductions

-

(50,000)

Less: Section 80D Deductions

-

(20,000)

Less: Standard Deduction

-

(50,000)

Taxable Income

安徽快3Rs。12,00,000

Rs.9,30,000

Tax Payable as per the Income Tax Slab 2020-21

Up to Rs.2.5 lakh

0

0

Rs.2.5 lakh – Rs.5 lakh

12,500

12,500

Rs. 5 lakh – Rs.7.5 lakh

25,000

50,000

安徽快3Rs。7。5 lakh – Rs。 10 lakh

37,500

36,000

Rs. 10 lakh – Rs.12.5 lakh

40,000

0

Total

1,15,000

98500

Add: Health & Education Cess (4%)

4600

3940

Net Tax Payable

1,19,600

Rs.1,02,440


Case 3 – Taxable Income More than 15 lakh

Manish, a 37-year-old individual is working with a MNC and earning Rs.16 lakh per annum. He is planning to make certain investments in this financial year to save tax. He is planning to make Rs.1.5 lakh investment under Section 80C and investments in NPS under Section 80CCD of Rs. 50,000. He is also paying health insurance premium of Rs. 25,000 which he can avail as a deduction under Section 80D. He has an ongoing home loan as well. He will avail a deduction of Rs.2 lakh on home loan interest amount as well under Section 24.

Let’s check the income tax payable for FY 2020-21 (AY 2021-22) under the old tax regime vs new tax regime:
 

Particulars

New Tax Regime (in Rs.)

Old Tax Regime (in Rs.)

Gross Total Income

16,00,000

16,00,000

Less: Section 80C Deductions

-

(1,50,000)

Less: Section 80CCD Deductions

-

(50,000)

Less: Section 80D Deductions

-

(25,000)

Less: Section 24 Deduction

-

(2,00,000)

Less: Standard Deduction

-

(50,000)

Taxable Income

Rs.16,00,000

Rs。11,25,000

Tax Payable as per the Income Tax Slab 2020-21

Up to Rs.2.5 lakh

0

0

Rs.2.5 lakh – Rs.5 lakh

12,500

12,500

Rs。 5 lakh – Rs。7。5 lakh

25,000

50,000

Rs.7.5 lakh – Rs. 10 lakh 15%

37,500

50,000

Rs. 10 lakh – Rs.12.5 lakh 20%

50,000

37,500

Rs。12。5 lakh – Rs。15 lakh 25%

62,500

-

More than Rs。15 lakh 30%

30,000

-

Total

2,17,500

1,50,000

Add: Health & Education Cess (4%)

8700

6,000

Net Tax Payable

2,26,200

Rs.1,56,000

 

The new income tax regime introduced lower income tax slab rates for income tax segments up to Rs.15 lakh. But, you can only avail the new tax regime if you are ready to forgo 70 deductions available under the old tax regime. These exemptions and deductions include Leave Travel Allowance, House Rent Allowance, deductions under chapter VI-A of the Income Tax Act which include Section 80C, 80CCC, 80CCD, 80D, 80DD, 80E, 80EE, 80G, 80GG, 80GGA, 80GGC and others. Not only this, you will not be able to avail standard deduction and home loan interest under Section 24.

Income Tax Slab for AY 2021-22 Max Life Insurance

The new income tax regime introduced lower income tax slab rates for income tax segments up to Rs.15 lakh. But, you can only avail the new tax regime if you are ready to forgo 70 deductions available under the old tax regime. These exemptions and deductions include Leave Travel Allowance, House Rent Allowance, deductions under chapter VI-A of the Income Tax Act which include Section 80C, 80CCC, 80CCD, 80D, 80DD, 80E, 80EE, 80G, 80GG, 80GGA, 80GGC and others. Not only this, you will not be able to avail standard deduction and home loan interest under Section 24.Income Tax Slab for AY 2021-22 Max Life Insurance

So, if you are making certain investments under the sections mentioned above, it is highly recommended to stay on the old tax regime as you will be able to reduce your taxable income, thus reducing your income tax liability as well.

On the other hand, if you are someone who is looking for an easy income tax calculation and income tax filing process or don’t want to make tax saving investments, then you can opt for the new tax regime.

Income Tax Slab 2020 - FAQs

Q. What are the new tax brackets for 2020?

A. Following are the new income tax slab for FY 2020-21 & AY 2021-22:

Taxable Income Bracket

Tax Rate

Up to Rs.2.5 lakh

Exempt

Rs。2。5 lakh - Rs。5 lakh

5%*

Rs。5 lakh - Rs。7。5 lakh

10%

Rs.7.5 lakh - Rs.10 lakh

15%

Rs.10 lakh - Rs.12.5 lakh

20%

Rs.12.5 lakh - Rs.15 lakh

25%

Above Rs.15 lakh

30%


*As per Section 87A, individuals having taxable income of up to Rs.5 lakh will be able to avail a rebate of Rs.12500 or 100% of income tax amount, whichever is less. [1]

Q. Are the income tax slab rates under new tax regime same for individuals and senior citizens?

A. Yes, the income tax slab 2020 under the new tax regime is same for all the taxpayers. Unlike the old tax regime, the tax rates under new regime are same for regular individuals, senior citizens (more than 60 years of age to 80 years) and super senior citizens (more than 80 years of age).

Q. Can I avail Standard Deduction in New Tax Regime?

A. No, you cannot avail standard deduction in the new tax regime. Under the Union Budget 2020, you will not be able to avail 70 deductions under the new tax regime.

Q. Is the Income Tax Slab different for men and women?

A. No, income tax slab for FY 2020-21 are same for men and women. Only the senior citizens and super senior citizens get concessional income tax slabs under the old tax regime.

Q. What is 87A in Income Tax?

A.安徽快3 Under Section 87A of the Income Tax Act, 1961, you can avail income tax rebate if your net taxable income is not more than Rs.5 lakh. Section 87A is available only for individuals and HUF. The total rebate under Section 87A is Rs. 12,500 or 100% of income tax amount, whichever is less.

Sources:

[1]http://www.incometaxindia.gov.in/_layouts/15/dit/mobile/viewer.aspx?path=http://www.incometaxindia.gov.in/charts++tables/tax+rates.htm&k&IsDlg=0

[2] http://www.indiabudget.gov.in/doc/Budget_Speech.pdf

[3] http://www.indiabudget.gov.in/doc/memo.pdf

ARN:- June/Bg/22D

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