Income Tax Slab rate / Surcharge & Education and Health Cess for AY 2019-20

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(1)    Individual/ HUF/ AOP / BOI and every artificial juridical persons:
Level of Total Income   Rate of income-tax
Where the total income
Does not exceed Rs. 2,50,000   Nil
Exceeds Rs. 2,50,000 but does not exceed Rs. 5,00,000 5% of the amount by which the total income exceeds Rs. 2,50,000
Exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000 Rs. 12,500 plus 20% of the amount by which the total income exceeds Rs. 5,00,000
Exceeds Rs. 10,00,000   Rs. 1,12,500 plus 30% of the amount by which the total income exceeds Rs. 10,00,000
  • For resident individuals of the age of 60 years or more but less than 80 years at any time during the previous.
Level of total income Rate of income-tax
Where the total income
Does not exceed Rs. 3,00,000 Nil
Exceeds Rs. 3,00,000 but does not exceed Rs. 5,00,000 5% of the amount by which the total income exceeds Rs. 3,00,000
Exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000 Rs. 10,000 plus 20% of the amount by which the total income exceeds Rs. 5,00,000
Exceeds Rs. 10,00,000 Rs. 1,10,000 plus 30% of the amount by which the total income exceeds Rs. 10,00,000
  • For resident individuals of the age of 80 years or more at any time during the previous year
Level of total income                                               Rate of income-tax
Where the total income
Does not exceed Rs. 5,00,000                              Nil
Exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000      20% of the amount by                                                                                                       which the total income                                                                                                          exceeds Rs 5,00,000
Exceeds Rs. 10,00,000                                             Rs. 1,00,000 plus 30% of the                                                                                             amount by which the total income                                                                                     exceeds Rs. 10,00,000

 

(4) Circular No. 28/2016, dated 27-07-2016

Clarification regarding attaining prescribed age of 60 years/80 years on 31st March itself, in case of senior/very senior citizens whose date of birth falls on 1st April

  • The Supreme Court in the case of Prabhu Dayal Sesma State of Rajasthan &, another 1986, AIR, 1948 observed that while counting the age of the person, whole of the day should be reckoned and it starts from 12 o’clock in the midnight and he attains the specified age on the day preceding, the anniversary of his birthday.

 

  • The CBDT has, vide this Circular, clarified that a person born on 1st April would be considered to have attained a particular age on 31st March, the day preceding the anniversary of his
  • Therefore, a resident individual whose 60th birthday / 80th birthday falls on 1st April, 2019, would be treated as having attained the age of 60 years in the P.Y.2018-19, and would be eligible for higher basic exemption limit of Rs. 3 lakh/Rs. 5 lakh in computing his tax liability for Y.2019-20.

 

 

1.2 SURCHARGE AND MARGINAL RELIEF

 

The rates of surcharge applicable for A.Y. 2019-20 are as follows –

 

 

Surcharge (as a percentage of income tax)-

If total income is If total income is in the range of If total income is
Up to Rs.50 lakhs Rs.50 lakhs to Rs.1 crore Above Rs.1 crore
Individuals/HUF/AOP/BOI/artificial juridical person Nil 10% 15%

 

The above surcharge is subject to a Marginal relief Why there is a need for marginal relief?

Consider Example (A) and (B)

Example : (A) Taxpayer : Mr. Active, 54 years having total income of Rs.50,00,000.

Particulars Rs.
Tax on Rs.50,00,000

Add: Surcharge Sub-total

13,12,500

Nil

13,12,500

Example : (B) Taxpayer: Mr. Passive, 55 years having total income of Rs.50,50,000.

Particulars Rs.
Tax on Rs.50,50,000 13,27,500
Add: Surcharge (10%) 1,32,750
Sub-total 14,60,250

 

Now, as compared to Example (A), in Example (B), income is increased by Rs. 50,000, while tax is increased by Rs.1,47,750, therefore, there is a need for marginal relief.

Under marginal relief, tax liability of Rs. 50,50,000 is restricted as under:-

Tax on 50,50,000                                                               = Tax on 50,00,000 + (Total Income – Rs.50,00,000)

= Tax on 50,00,000+ (50,50,000-Rs.50,00,000)

= 13,12,500 + 50,000

= 13,62,500

The above tax is increased by health and education cess

J EASY STEPS to compute Final tax liability when total income of Individual ranges between Rs.50,00,001 to Rs. 1,00,00,000.

Step 1: Find out regular tax liability + Surcharge (Ignore education cess)

Step 2: Find out tax on 50,00,000 + (Total Income-50,00,000)

Step 3: Step 1 or Step 2 whichever is lower

Step 4: Add Health and Education Cess

1.3 HEALTH AND EDUCATION CESS (HEC)

“Health and Education cess (HEC)” is to be calculated at the rate of 4% of income-tax and surcharge. HEC is applicable to all assessees i.e., individuals, HUFs, AOP/BOIs, co-operative societies, firms, LLPs, local authorities and companies.

The format of computation of HEC is as under:

(a)    Income Tax

(b)    Add: Surcharge on Income Tax (if any)

(c)     Sub-Total (a+b)

(d)    Health and Education cess @ 4% on (c)

(e)    Total Tax payable (c+d)

XXXXX

XXXXX

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XXXXX

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Note: No marginal relief would be available in respect of such cess.