Interim finance minister Piyush Goyal on Friday announced
full tax rebate to individuals having an annual income of Rs 5 lakh. This translates to a benefit of Rs 18,500 crore to more than 3 crore taxpayers, applicable from April 1 of the current fiscal year.
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However,
individuals in the higher tax brackets will not get any relief as rebate has gone up and not the tax slab itself, the finance minister said during his budget speech in the parliament on Friday.
Here are the income tax slabs for 2019-20
Over 3 crore salaried class, pensioners, self-employed and small businesses with total income of up to Rs 5 lakh will save Rs 10,900 in income tax annually.
If you are earning gross income of Rs 6.5 lakh per year and you have made investments of Rs 1.5 lakh allowed under 80C, your taxable income will be Rs 5 lakh. Up to Rs 2.5 lakh, you need not to pay the tax.
For the next Rs 2.5 lakh, you pay 5 percent income tax of Rs 12,500. With the new tax rebate scheme, you will get Rs 12,500 back as a rebate and your net tax payable is nil.
In case your taxable income is Rs 10 lakh, your total tax would rise to Rs 1,17,000 i.e. nil for the first Rs 2.5 lakh, Rs 12,500 for the next Rs 2.5 lakh at a 5 percent rate, Rs 1,00,000 for the rest Rs 5 lakh at a rate of 20 percent, and lastly Rs 4,500 as cess at the rate of 0.4 percent on the last Rs 5 lakh.
In case of senior citizens within the age bracket of 60-80 years, no tax is applicable if the total income does not exceed Rs 3 lakh, 5 percent tax is applicable if the total income exceeds Rs 3 lakh but not Rs 5 lakh, Rs 10,000 with plus an additional 20 percent if the total income exceeds Rs 5 lakh but not Rs 10 lakh and Rs 1,10,000 plus 30 percent tax if the total income exceeds Rs 10 lakh.
In case of senior citizens who are 80 years or older, no tax is applicable on the total income of Rs 5 lakh, 20 percent of tax applicable on the total income exceeding Rs 5 lakh but not more than Rs 10 lakh and Rs 1,00,000 plus 30 percent where the total income exceeds Rs 10 lakh.
For co-operative societies: 10 percent tax will be applicable on the total income where the total income does not exceed Rs 10,000, Rs 1,000 plus 20 percent tax is applicable where the total income exceeds Rs 10,000 but does not exceed Rs 20,000 and Rs 3,000 plus 30 percent tax where the total income exceeds Rs 20,000.
Every firm and the local authority has been charged with 30 percent income tax by the finance minister.
In case of a domestic company where the turnover in the previous year 2016-17 does not exceed Rs 250 crore, 25 percent of the total income as tax. Additionally, the standard deduction has been increased to Rs 50,000 from Rs 40,000 currently. Also, TDS threshold on interest earned on bank/post office deposits is being raised from Rs 10,000 to Rs 40,000.
Tax on notional house property income is exempted up to two self-occupied houses. TDS on rent (section 194I) – Threshold limit raised from Rs 180,000 to Rs 240,000.
Capital Gain Investment Scheme: Taxpayer having capital gains up to Rs 2 crore can take benefit of investments in two residential houses (available once in a lifetime).
Notional income tax under income from house property kept as inventory, can avail exemption up to two years instead of one year.First Published: Feb 2, 2019 3:04 PM IST
