Income Tax Rates for AY 2020-21 (FY 2019-20)
What is an income tax slab?
Under the Income Tax Act, 1961 – A person has to pay taxes to the Government based on his annual income i.e. income earned during a financial year.
Earning of income differs from person to person. Some people earn more and some people earn less. So, every person can’t pay same amount of tax to the Govt.
Keeping in mind, this income inequality/Income disparity – India has lower tax rates for persons earning lower income and higher tax rates for persons earning higher income. This has been done by applying a different tax rate for different amounts of annual income. These slabs are tweaked by the government in the annual budget announcements.
For the financial year 2019-20, which means the year from April 1, 2019 – March 31, 2020 – the tax rate slabs have been fixed as below :
1.1 In case of an Individual (resident or non-resident) [Below 60 Years of age]
| Taxable Income | Tax Rate |
| Up to Rs. 2,50,000 | Nil |
| Rs. 2,50,001 to 5,00,000 | 5% |
| Rs. 5,00,001 to 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
1.2 In case of an Individual (Resident Senior Citizen ) [Age of 60 Years or above but below the age of 80 Years]
| Taxable Income | Tax Rate |
| Up to Rs. 3,00,000 | Nil |
| Rs. 3,00,001 to 5,00,000 | 5% |
| Rs. 5,00,001 to 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
1.3 In case of an Individual (Resident Super Senior Citizen ) [Age of 80 Years or above]
| Taxable Income | Tax Rate |
| Up to Rs. 5,00,000 | Nil |
| Rs. 5,00,001 to 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
Additional Components :
Surcharge (for all individuals) :
> 10% of income tax where total income exceeds Rs. 50,00,000.
> 15% of income tax where total income exceeds Rs. 1,00,00,000.
Health and Education Cess :
> 4% of Income tax plus Surcharge
Note : A resident individual is entitled for Rebate under section- 87A 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.
2. In case of Hindu Undivided Family (Including AOP, BOI and Artificial Juridical Person)
| Taxable Income | Tax Rate |
| Up to Rs. 2,50,000 | Nil |
| Rs. 2,50,001 to 5,00,000 | 5% |
| Rs. 5,00,001 to 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
Additional Components :
Surcharge (for all individuals) :
> 10% of income tax where total income exceeds Rs. 50,00,000.
> 15% of income tax where total income exceeds Rs. 1,00,00,000.
Health and Education Cess :
> 4% of Income tax plus Surcharge
3. Income Tax Rate for Partnership Firms/LLP :
A Partnership firm/LLP is taxable at a flat rate of 30%
Plus,
Surcharge:- 12% of tax where total income exceeds Rs. 1 crore.
Health and Education cess: 4% of income tax plus surcharge.
4. Income Tax Rate for Local Authority :
A Local Authority is taxable at a flat rate of 30%
Plus,
Surcharge:- 12% of tax where total income exceeds Rs. 1 crore.
Health and Education cess: 4% of income tax plus surcharge.
5. Income Tax Rate for Co-operative Society :
| Taxable Income | Tax Rate |
| Up to Rs. 10,000 | 10% |
| Rs. 10,000 to 20,000 | 20% |
| Above Rs. 20,000 | 30% |
6. Income Tax Rate for Domestic Companies :
| Turnover Particulars | Income Tax Slabs |
| Where its total turnover or gross receipt during the previous year 2017-18 does not exceed Rs. 400 crore | 25% |
| If the company utilized Section 115BA | 25% |
| If the company utilized Section 115BAA | 22% |
| If the company utilized Section 115BAB | 15% |
| For any other domestic company | 30% |
Additional Components :
Surcharge :
> 10% of income tax where total income is more than Rs. 1 crore but doesn’t exceed Rs. 10 crore.
> 12% of income tax where total income exceeds Rs. 10 crore.
Health and Education Cess :
> 4% of tax amount plus Surcharge
7. Income Tax Rate for Foreign Companies :
| Nature of Income | Tax Rate |
| Royalty received from Government or an Indian concern or fees for rendering technical services where such agreement has, in either case, been approved by the Central Government | 50% |
| Any Other Income | 40% |
Additional Components :
Surcharge :
> 2% of income tax where total income is more than Rs. 1 crore but doesn’t exceed Rs. 10 crore.
> 5% of income tax where total income exceeds Rs. 10 crore.
Health and Education Cess :
> 4% of tax amount plus Surcharge
Note :
For your reference :
1. Detail explanation of Section 115BAA:
A. 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) or 35(2AB) [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 or 80LA or 80M 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.
B. Companies availing benefit of lower tax rate under new provisions of sections 115BAA have been Exempted from MAT on book profit under section 115JB
2. Detail explanation of Section 115BAB:
A. 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) The company is not engaged in any business other than the business of manufacture or production of any article or thing and research in relation to, or distribution of, such article or thing manufactured or produced by it. The following businesses would not be considered as a business of manufacture or production of any article or thing:
-
- Development of computer software in any form or in any media;
- Mining;
- Conversion of marble blocks or similar items into slabs;
- Bottling of gas into cylinder;
- Printing of books or production of cinematograph film; or
- Any other business as may be notified by the Central Government on this behalf.
The business of generation of electricity shall be regarded as business of manufacture or production of any article or thing for this purpose.
c) 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) or 35(2AB) [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 or 80M of the Act (such as 80IA/IB/IC/ID/IE etc.)
d) 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.
e) After claiming depreciation other than additional depreciation u/s 32(1)(iia).
f) 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.
B. Companies availing benefit of lower tax rate under new provisions of sections 115BAB have been Exempted from MAT on book profit under section 115JB
