INCOME TAX SLABS & RATES

Income Tax Slabs & Rates A.Y. 2020-21 [F.Y. 2019-20] Individual resident (Aged below 60 years) or Any NRI or HUF or AOP or BOI or AJP

Income SlabIncome Tax
Upto Rs. 2,50,000
NIL
Rs. 2,50,000 – Rs. 5,00,000
5%
Rs. 5,00,000 – Rs. 10,00,000
20%
Above Rs. 10,00,000
30%
Surcharge( subject to Marginal Relief )
10% (If taxable income > Rs. 50 lacs)
 
15% (If taxable income > Rs. 1 Crore)
 
25% (If taxable income > Rs. 2 Crore)
 
37% (If taxable income > Rs. 5 Crore)
Health & Education Cess
4% of (Income Tax + Surcharge).

Senior Citizen (Aged 60 years or more but less than 80 years)

Income SlabIncomeTax
Upto Rs. 3,00,000
NIL
Rs. 3,00,000 – Rs. 5,00,000
5%
Rs. 5,00,000 – Rs. 10,00,000
20%
Above Rs. 10,00,000
30%
Surcharge( subject to Marginal Relief )
10% (If taxable income > Rs. 50 lacs)
 
15% (If taxable income > Rs. 1 Crore)
 
25% (If taxable income > Rs. 2 Crore)
 
37% (If taxable income > Rs. 5 Crore)
Health & Education Cess
4% of (Income Tax + Surcharge).

Very Senior Citizen (Aged 80 years or more)

Income SlabIncome Tax
Upto Rs. 5,00,000
NIL
Rs. 5,00,000 – Rs. 10,00,000
20%
Above Rs. 10,00,000
30%
Surcharge( subject to Marginal Relief )
10% (If taxable income > Rs. 50 lacs)
 
15% (If taxable income > Rs. 1 Crore)
 
25% (If taxable income > Rs. 2 Crore)
 
37% (If taxable income > Rs. 5 Crore)
Health & Education Cess
4% of (Income Tax + Surcharge).
  • Rebateunder Section 87A Rs12, 500 or 100% of incometax (whichever is lower) for individuals with income below Rs 5 Lakhs Co-Operative Society.
Income SlabIncome Tax
Upto Rs. 10,000
10%
Rs. 10,000 – Rs. 20,000
20%
Above Rs. 20,000
30%
Surcharge( subject to Marginal Relief )
37% (If taxable income > Rs. 5 Crore)
Health & Education Cess
4% of (Income Tax + Surcharge).

FIRM

ParticularIncome Tax
Income Tax
30%
Surcharge( subject to Marginal Relief )
12% (If taxable income > Rs. 1 Crore)
Health & Education Cess
4% of (Income Tax + Surcharge).

Local Authority

ParticularIncome Tax
Income Tax
30%
Surcharge( subject to Marginal Relief )
12% (If taxable income > Rs. 1 Crore)
Health & Education Cess
4% of (Income Tax + Surcharge).
  • Domestic Company (1):   Claiming Exemptions and Turnover in 2017-18 upto Rs. 400 crores.
ParticularIncome Tax
Income Tax
25%
Surcharge( subject to Marginal Relief )
7% (If taxable income > Rs. 1 Crore)
 
12% (If taxable income > Rs. 12 Crore)
Health & Education Cess
4% of (Income Tax + Surcharge).
  • Domestic Company (2):   Claiming Exemptions and Turnover in 2017-18 exceeding Rs. 400 crores
ParticularIncome Tax
Income Tax
30%
Surcharge( subject to Marginal Relief )
7% (If taxable income > Rs. 1 Crore)
 
12% (If taxable income > Rs. 12 Crore)
Health & Education Cess
4% of (Income Tax + Surcharge).
  • Domestic Manufacturing Company (3):  NOT Claiming Exemptions U/s 155BAA
ParticularIncome Tax
Income Tax
22%
Surcharge
10% (If taxable income > Rs. 1 Crore)
Health & Education Cess
4% of (Income Tax + Surcharge).
  • Domestic Manufacturing Company (4):  NEW Company U/s 155BAB
ParticularIncome Tax
Income Tax
15%
Surcharge
10% (If taxable income > Rs. 1 Crore)
Health & Education Cess
4% of (Income Tax + Surcharge).

Foreign Company

ParticularIncome Tax
Royalty received from Government or an Indian concern in pursuance of an agreement made with the Indian concern after March 31, 1961, but before April 1, 1976, or fees for rendering technical services in pursuance of an agreement made after February 29, 1964 but before April 1, 1976 and where such agreement has, in either case, been approved by the Central Government
50%
Any other income
40%
Surcharge
2%(If taxable income>Rs.1Crore)
 
5%(If taxable income>Rs.10Crore)
Health & Education Cess
4% of (Income Tax + Surcharge).
Marginal Relief on Surcharge:

                                                                      In case taxable income exceeds Rs.50 lacs / Rs.1crore Surcharge is payable on income tax at applicable rates. If increase in Income Tax + Surcharge is more than the increase income over Rs.50 lacs / Rs.1crore, the ‘Surcharge’ is reduced by such amount so that the ‘Income Tax + Surcharge’ become equal to increase in’ Total Taxable Income’ over Rs.50 lacs /1Crore respectively.The amount sor educed from ‘Surchage’ is ‘Marginal Relief on Surcharge’.

 

Section 115 BAA – Lower tax rates introduced for Domestic Companies

 

  1. A new section 115BAA has been inserted w.e.f. A.Y 2020-21 which provides option to a domestic company to pay tax at lower rate of 22% (including 10% surcharge and 4% cess) i.e. effective tax rate u/s 115BAA would be 25.168% provided the income is computed-Without claiming exemption/ deduction
  • u/s 10 AA [SEZ units]
  • u/s 32(1) (iia) [additional depreciation qua new plant and machinery @ 20%/ 30%],
  • u/s 32 AD [15%on new assets in under taking set up in specified backward areas in Andhra Pradesh, Bihar, Telangana and WestBengal ] u/s 33AB [specified percentage of amounts deposited with Tea/Coffee/Rubber Board]
  • u/s 33 ABA [specified percentage of amounts deposited in Site Restoration Account] u/s 35(1)(ii)/(iia), 35 (2AA) [specified deduction for scientific research]
  • u/s 35 AD [expenditure on specified business]
  • u/s 35 CCC [expenditure on agricultural extension project] u/s 35 CCD [expenditure on skill development project]
  • under Part C of Chapter VIA except section 80 JJAA of the Act (such as 80 IA/ IB/ IC/ ID/ IE etc.)
  1. 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.
  2. After claiming depreciation  other than additional depreciation u/s 32(1)(iia).

Benefit to flower rate under the a for said 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.

 

Section 115BAB – Lower tax rates introduced for Domestic manufacturing companies

 

  • New section 115BAB has been inserted w.e.f. A.y 2020-21 which provides option to a domestic manufacturing company to pay tax at a lower rate of 15% (including 10% surcharge and 4% cess)
  • if such company is set-up and registered, 2019 on or after 1st October and commences manufacturing activity upto 31st March, 2023 .
  • 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. Additionally, the following conditions must be fulfilled by the company to avail benefit of lower tax rate:
  1. company must not be formed by splitting up or the reconstruction of a business already in existence.
  2. 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.
  3. Company must not use building previously use hotel or a convention center.

     

  • 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.
  • Section 115JB – Reduced tax on book profit of companies not claiming benefit u/s 115BAA/ 115BAB
  • Provisions of section 115JB have been amended to reduce the Minimum Alternate Tax (MAT) on book profit from 18.5% to 15% , w.e.f. assessment     year2020-21.
  • Companies availing benefit of lower tax rate under new provisions of sections 115BAA/ 115BAB have been Exempted from MAT on book profitunder section115JB.

Leave a Comment

Your email address will not be published. Required fields are marked *