Income Tax Slab For Ay 2020-21 and Financial Year 2019-20
1. Income Tax Slab Rate for AY 2020-21 for Individuals:
1.1 Individual (resident or non-resident), who is of the age of less than 60 years on the last day of the relevant previous year:
- Up to 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%
1.2 Resident senior citizen, i.e., every individual, being a resident in India, who is of the age of 60 years or more but less than 80 years at any time during the previous year:
- Up to 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%
Section 87A Rebate
- During the interim budget declared in February 2019, the then finance minister Mr. Piyush Goyal announced the government’s proposal that people with income up to INR 5,00,000 will not have to pay any taxes. And this would be possible with the help of tax rebates.
- The proposed modification to the Income Tax Act would make sure that taxpayers, whose net taxable income is up to INR 5,00,000 don’t have to pay any income tax. To allow for this to happen, an existing section, 87A was updated in the Income Tax Act.
- Section 87A was introduced for the first time in 2013, allowing taxpayers to avail rebate if their net taxable income was below the threshold levels.
- What is an income-tax rebate? As per the amendments to Section 87A, if your annual taxable income is INR 5,00,000 or lower, you can avail the tax rebate. The existing laws made way for a 2,500 income tax rebate. However, the updated law ensured that the limit was increased to a 12,500 income tax rebate.
- But it is crucial to understand that this rebate holds good only for taxpayers whose annual taxable income is below the threshold limit. If you exceed the limit, you cannot avail any rebates. Here are the eligibility criteria for availing the tax rebate.
- The rebate is designed only for individual taxpayers. If you belong to a HUF or firm or company, you cannot avail this rebate.
- There are no restrictions based on gender for this section, meaning men and women can both avail the benefits.
- Net taxable income of an individual should not exceed INR 5,00,000 for the FY 2019-2020.
- The laws make way for a maximum rebate of INR 12,500 under this section. In other words, if the taxes that you are liable to pay are INR 12,500 or less, you can avail the rebate.