Income Tax Slab Rates of Financial Year 2020-21

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Maharshi Shah

Assessment Year
Income Tax Rates
Slab Rates

The Union Budget for the year 2020 was presented by the Finance Minister Nirmala Sitharaman on the 1st of February 2020. The new income tax slab rates will be applicable from Financial Year 2020-21 corresponding to Assessment Year 2021-22. The Finance Minister had stated that the taxpayer can opt to follow the current tax regime or join the new tax regime. The current tax regime consists of over 100 exemptions and deductions. This number of exemptions and deductions have been cut down to around 30.

Income Tax Slab Rates FY 2020-21

Income tax slab rates for individuals (for resident or non-resident below the age of 60 years):

 

Income Range  Current Income Tax Rates New Income Tax Rates
Up to INR 2,50,000 NIL NIL
INR 2,50,001 to INR 5,00,000 5% 5%
INR 5,00,001 to INR 7,50,000 20% 10%
INR 7,50,001 to INR 10,00,000 20% 15%
INR 10,00,001 to INR 12,50,000 30% 20%
INR 12,50,001 to INR 15,00,000 30% 25%
Above INR 15,00,000 30% 30%

 

Income Tax slab rates for senior citizens (for individuals who are of the age of 60 years or more but less than the age of 80 years): 

Income Range Current Income Tax Rates
Up to INR 3,00,000 NIL 
INR 3,00,001 to INR 5,00,000  5%
INR 5,00,001 to INR 10,00,000 20%
Above INR 10,00,000 30%
Income Range New Income Tax Rates
Up to INR 2,50,000 NIL
INR 2,50,001 to INR 5,00,000  5%
INR 5,00,001 to INR 7,50,000 10%
INR 7,50,001 to INR 10,00,000 15%
INR 10,00,001 to INR 12,50,000 20%
INR 12,50,001 to INR 15,00,000 25%
Above INR 15,00,000 30%

Income tax slab rates for Super Senior citizens (for individuals of the age of 80 years and above):

Income Range  Current Income Tax Rates
Up to INR 5,00,000 NIL 
INR 5,00,001 to INR 10,00,000 20%
Above INR 10,00,000 30%
Income Range New Income Tax Rates
Up to INR 2,50,000 NIL
INR 2,50,001 to INR 5,00,000  5%
INR 5,00,001 to INR 7,50,000 10%
INR 7,50,001 to INR 10,00,000 15%
INR 10,00,001 to INR 12,50,000 20%
INR 12,50,001 to INR 15,00,000 25%
Above INR 15,00,000 30%

Cess: An additional 4% Health and Educational Cess will be applicable to the tax amount calculated in the above 3 categories.
Surcharge: 10% of Income Tax when total income exceeds INR 50,00,000 and 15% of income tax when total income exceeds INR 1,00,00,000.
Rebate: An individual (resident) is entitled to rebate under section 87A if his total income does not exceed INR 5,00,000. The amount of rebate shall be 100% of income-tax or INR 12,500, whichever is less. 

Income Tax slab rates for partnership firms:

A partnership firm that includes LLP is taxable at 30%. 
Surcharge: A surcharge of 12% is payable if total income exceeds INR 1 Cr. 
Cess: An additional 4% surcharge will be taxable for Health and Education Cess.

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Income Tax Rates for Companies:

Particulars  Tax Rates
Existing Companies   22%
Newly Incorporated Companies (Manufacturing)  15%

The tax rate for foreign companies is 40%. 
Cess: An additional 4% Health and Educational Cess will be applicable to the tax amount.
Surcharge: A surcharge of 12% is payable if total income exceeds INR 1 Cr. 

Income Tax slab rates for AOP/BOI/Any other artificial juridical person:

 

Net Income Range Income Tax Rates
Up to INR 2,50,000 NIL 
INR 2,50,000 to INR 5,00,000  5%
INR 5,00,000 to INR 10,00,000 20%
Above INR 10,00,000 30%

Cess: An additional 4% Health and Educational Cess will be applicable to the tax amount calculated above.
Surcharge: 10% of Income Tax when total income exceeds INR 50,00,000 and 15% of income tax when total income exceeds INR 1,00,00,000.

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Income Tax slab rates for co-operative society:

Net Income Range Income Tax Rate
Up to INR 10,000 10%
INR 10,000 to INR 20,000 20%
Above INR 20,000 30%

Cess: An additional 4% Health and Educational Cess will be applicable to the tax amount calculated above.
Surcharge: 12% of tax is applicable when total income exceeds INR 1 Cr.

Income Tax rates for local authority:

The local authority is taxable at 30%. 
Cess: An additional 4% Health and Educational Cess will be applicable to the tax amount calculated above.
Surcharge: 12% of Income Tax when total income exceeds INR 1 Cr.

Surcharge:

The given tax rate slabs are applicable to any individual, HUF or artificial judicial person.

Nature of Income Up to INR 50L  More than 50L and up to 1 Cr. More than 1 Cr. and up to  2 Cr.  More than 2 Cr. and up to 5 Cr. More than 5 Cr. and up to 5 Cr.  More than 5 Cr. and up to 10 Cr. More than 10 Cr.
Short term capital gain covered under section 111A NIL 10% 15% 15% 15% 15% 15%
Long term capital gain covered under section 112A NIL 10% 15% 15% 15% 15% 15%
Any other Income  NIL 10% 15% 25% 15% 37% 37%

 

FAQs

What is Surcharge?

It is the amount that is levied upon the tax payable and not on the income that is generated. In other words, it is a tax that is levied upon the general tax.

For example: if an individual has generated an income of INR 100 over which the tax payable is INR 30, then the surcharge would be 10% of INR 30.

How to calculate rebate u/s 87A?

1. Calculate your Gross Total Income (GTI)
2. Reduce the deductions under sections 80C to 80U
3. Calculate your Tax Payable as per Income Tax slabs
4. Deduct the amount of rebate allowed

What is the difference between the Financial Year and Assessment Year?

The Financial Year is the year which begins on 1st April and ends on 31st March. It is the year in which income is earned by the taxpayer. The Assessment Year is a year immediately following the Financial Year. The taxpayer needs to file the Income Tax Return (ITR) not in the year in which he/she earns the income but after the end of that year i.e, in the assessment year.  

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