What is Income Tax Slabs 2019-20? A Beginners Guide to Income Tax


income tax

Quite often we hear our parents talking about filing income tax returns, Income Tax Slabs 2019-20, income tax calculations and wondering how to save money on taxes when the annual tax season arrives. Even the newspapers and media keeps on reminding taxpayers to file their returns timely.

What is the entire buzz about? What does income tax really mean?

Income Tax

Income tax is a sum of money taken by the Government of India from anybody who earns in India, based on the amount they earn annually. This tax taken from the people adds up to the revenue of the nation. It is used for meeting the welfare and infrastructure expenditures necessary for the development of the nation.

Following are a few points that’ll help you get a better insight into how income tax really works in India and how you can Save Invest Prosper on taxes?

Tax Cycle

The annual tax cycle under the Income Tax Law starts on 1st April and ends on 31st March of the next year.

What is Income?

Let’s have a look at the break down of income by the Income Tax Department:

• Income from house property (basically rental income).
• Income from capital gains such as shares, mutual funds, house property etc.
• Income from business and profession. This is for those who are self-employed or have their own business such as dentists, lawyers, tutors etc.
• Income from other sources such as fixed deposits, savings accounts etc.

• Income from Employers. Salary from employers where we work and get money in terms of salary.

Income Tax Slabs For Income Tax Calculator

Tax slabs are basically blocks in which people’s incomes are grouped. In India, we have four tax brackets each with an increasing tax rate. these slabs are revised by Indian Govt. as per requirement after one year.

There are three categories of individual taxpayers:
1.Individuals (below the age of 60 years) which includes residents as well as non-residents
2.Resident Senior citizens (60 years and above but below 80 years of age)
3.Resident Super senior citizens (above 80 years of age)

 

Income Tax Slabs 2019-20 for Individual Taxpayers & HUF (Less Than 60 Years Old) for FY 2019-20 – Part I

Income Tax Slabs Tax Rate Health and Education Cess
Income up to Rs 2,50,000* No tax
Income from Rs 2,50,001 – Rs 5,00,000 5% of total income exceeding ₹2,50,000 4% of Income Tax
Income from Rs 5,00,001 – 10,00,000 ₹12,500 + 20% of total income exceeding ₹5,00,000 4% of Income Tax
Income more than Rs 10,00,000 ₹1,12,500 + 30% of total income exceeding ₹10,00,000 4% of Income Tax

Start SIP & Save Upto ₹ 46,800 on Taxes.

Surcharge: 10% of income tax, where the total income exceeds Rs.50 lakhs up to Rs.1 crore.

Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.

*Income tax exemption limit for FY 2019-20 is up to Rs. 2,50,000 for individual & HUF other than those covered in Part(II) or (III)

 

Income Tax Slabs 2019-20 for Senior Citizens (60 Years Old Or More but Less than 80 Years Old) for FY 2019-20 – Part II

Income Tax Slabs Tax Rate Health and Education Cess
Income up to Rs 3,00,000* No tax
Income from Rs 3,00,000 – Rs 5,00,000 5% 4% of Income Tax
Income from Rs 5,00,000 – 10,00,000 20% 4% of Income Tax
Income more than Rs 10,00,000 30% 4% of Income Tax

Start SIP & Save Upto ₹ 46,800 on Taxes

Surcharge: 10% of income tax, where the total income exceeds Rs.50 lakhs up to Rs.1 crore.

Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.

*Income tax exemption limit for FY 2019-20 is up to Rs. 3,00,000 other than those covered in Part(I) or (III)

 

Income Tax Slabs 2019-20 for Senior Citizens(80 Years Old Or More) for FY 2019-20 – Part III

Income Tax Slabs Tax Rate Health and Education Cess
Income up to Rs 5,00,000* No tax
Income from Rs 5,00,000 – 10,00,000 20% 4% of Income Tax
Income more than Rs 10,00,000 30% 4% of Income Tax

Start SIP & Save Upto ₹ 46,800 on Taxes

Surcharge: 10% of income tax, where the total income exceeds Rs.50 lakhs up to Rs.1 crore.

Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.

*Income tax exemption limit for FY 2019-20 is up to Rs. 5,00,000 other than those covered in Part(I) or (II)

 

Income Tax Slabs 2019-20 for Domestic Companies for FY 2019-20 – Part IV

Turnover Particulars Tax Rate
Gross turnover up to250 Cr. in the previous year 25%
Gross turnover exceeding 250 Cr. in the previous year 30%

In addition, cess and surcharge is levied as follows: Cess: 4% of corporate tax 

Surcharge: Taxable income is more than 1Cr. but less than 10Cr.: 7%

 Taxable income is more than 10Cr. :12%

 

How to Calculate Income Tax from Income Tax Slabs? With Example

Shikha has a total taxable income of Rs 7,00,000. This income has been calculated by including income from all sources such as salary, rental income, and interest income. Deductions under section 80 have also been reduced. Shikha wants to know his tax dues for FY 2019-20

Income Slabs Tax Rate Tax Calculation
*Income up to Rs 2,50,000 No tax
Income from Rs 2,50,000 – Rs 5,00,000 5% (Rs 5,00,000 – Rs 2,50,000) Rs 12,500
Income from Rs 5,00,000 – 10,00,000 20% (Rs 7,00,000 – Rs 5,00,000) Rs 40,000
Income more than Rs 10,00,000 30% nil
Tax Rs 52,500
Cess 4% of Rs 52,500 Rs 2,100
Total tax in FY 2019-20 Rs 54,600

 

*Please note that Shikha is an individual assessee having an income tax exemption of Rs 2,50,000. For other assessee as mentioned in table Part II & III, the Income tax limit for availing the exemption would be Rs 3,00,000 & Rs 5,00,000 respectively.

Filing Income Tax Returns (Paying your taxes to the Gov)

In order to reduce wastage of time and prevent the hassle of paperwork, there are now online options available for filing your income tax returns. Using the link https://incometaxindiaefiling.gov.in/, you can simply log in to the website and file your return.

For individuals with income less than Rs. 5 lakhs, there is an offline option available in which you need to download an ITR form and submit it to the ITR department.

How to Save Income Tax?

You can save your income tax with these income tax saving options. In case you are looking for investment in mutual funds, check out this guide to investing in mutual funds for beginners. 


By using a modern online investment App like Sqrrl, you can Save Money on taxes. By using Axe Tax, you can save your hard earned money by investing in most optimal tax savings instruments with minimum lock-ins. Sqrrl helps you plan your Tax saving in a very simple and convenient way.

Download Sqrrl from the Apple App Store & Google Play Store and get ready to Save Invest Prosper.

Written by

Vedant Kaushik