Knowing the correct income tax slab for your salary before filing your taxes is always necessary. Though your income may not be taxable today, with further appraisals in the future income tax slabs 2019-20 would also be applicable to you. The Union Budget of 2020 has been announced and there various changes in the exemptions and deductions you could claim. Also, the tax slabs have been updated and you can now choose which tax regime you want to opt for. So, let’s understand what these slabs are and the tax rates for the financial year 2020-2021 and 2019-2020.
What Is an Income Tax Slab?
The tax liability of a taxpayer depends on their annual income and their age. According to these two factors, the government of India decides the tax slabs. Thus, before you file your Income Tax Returns (ITR), it is crucial to check in which tax slab you fall in and pay your taxes respectively. It is also advised to keep monitor the alterations in tax slab every year as it may change during budget announcements.
New Tax Slabs for FY 2020-2021
| Tax Slab | Income Tax |
| Up to INR 2.5 lakh | Nil |
| INR 2.5 lakh to INR 5 lakh | 5% of the total income which is more than the tax slab |
| INR 5 lakh to INR 7.5 lakh | 10% of the total income which is more than the tax slab |
| INR 7.5 lakh to INR 10 lakh | 15% of the total income which is more than the tax slab |
| INR 10 lakh to INR 12.5 lakh | 20% of the total income which is more than the tax slab |
| INR 12.5 lakh to INR 15 lakh | 25% of the total income which is more than the tax slab |
| INR 15 lakh and above | 30% of the total income which is more than the tax slab |
Under the new tax regime, here are some income tax deductions and exemptions that you cannot claim if you choose the new tax slabs:
- Leave Travel Allowance (LTA)
- House Rent Allowance (HRA)
- Standard Deduction
- Other special allowances
- Chapter VI-A deduction (section 80C,80D, 80E and so on), except for Section 80CCD(2) which employer’s contribution to NPS
- Expenses during employment
Income Tax Slabs for Financial Year 2020-2021
The tax slabs differ based on the taxpayer’s age. The three categories are:
- Taxpayers that are below the age of 60
- Taxpayers who are senior citizens and are between the age of 60-80
- Taxpayers who are super senior citizens and are above the age of 80
Income Tax Rates for Taxpayers below 60 Years of Age for FY 2019-20
| Tax Slab | Income Tax |
| Up to INR 2.5 lakh | Nil |
| From INR 2.5 lakh to INR 5 lakh | 5% of the total income which is more than the tax slab |
| From INR 5 lakh to INR 10 lakh | 20% of the total income which is more than the tax slab |
| More than INR 10 lakh | 30% of the total income which is more than the tax slab |
Income Tax Rates for Taxpayers between 60 to 80 Years of Age for FY 2019-20
| Tax Slab | Income Tax |
| Up to INR 3 lakh | Nil |
| From INR 3 lakh to INR 5 lakh | 5% of the total income which is more than the tax slab |
| From INR 5 lakh to INR 10 lakh | 20% of the total income which is more than the tax slab |
| Income of above INR 10 lakh | 30% of the total income which is more than the tax slab |
Income Tax Rates for Taxpayers above 80 Years of Age for FY 2019-20
| Tax slab | Income tax |
| Up to INR 5 lakh | Nil |
| From INR 5 lakh to INR 10 lakh | 20% of the total income which is more than the tax slab |
| More than INR 10 lakh | 30% of the total income which is more than the tax slab |
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