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Income-Tax-Slab-Rates-&-Brackets-for-FY-2018-2019-&-AY-2019-2020

Income tax is a mandatory payment made to the government. Taxes in India can be categorized as – direct or indirect taxes. Indirect tax is the tax somebody collects on your behalf and then pays it to the government. For instance, theatres, restaurants, etc. While direct taxes can be classified in to the following types:

  • Income Tax: This is the tax that tax payers need to pay to the government.
  • Corporate Tax: This is the tax that companies have to pay on the profits they make from their businesses.

Besides, this article will explain you about income tax in more detail, take a look –

How income tax works?

Income tax is applicable for individuals, corporates, and businesses that generate income. The Income Tax Act, 1961 regulates the collection and administration of income tax in India. The government requires tax amount for several purposes that range from building infrastructure to paying state and central government employees. It helps the government in generating a steady source of income which can be used later for the development of the country.

Who are tax payers?

Any Indian citizen below 60 years is liable to pay taxes if his/her salary is more than 2.5 Lakhs. Also, if the person is above 60 years of age and gets more than 3 Lakhs, then he/she will have to pay taxes to the government of India. Here’re the following entities that are liable to pay direct taxes:

  • Body of individuals (BOI)
  • Hindu undivided family (HUF)
  • Local authorities
  • Corporate firms
  • Companies
  • Association of persons (AOP)

Why do we have to pay taxes?

Income tax paid by you aids the  government in improving the infrastructure of the country. Also, it provides better governance and helps to run several public services smoothly. This is a little step in which citizens contribute towards a better future of their motherland.

What is income tax slab?

Income tax is that percentage of your income that you pay to the government for the betterment of the public at large. The income paid by tax payers every month forms a large part of the revenue for the government of India. This income can be categorized into different groups on the basis of the amount of income. Such groups are called as tax slabs. Tax is charged at different rates on the range of income that falls under different tax slabs. The income tax slab rates are revised each year during the budget. There are three categories of individual taxpayers:

  • Individuals (resident or non-resident) below 60 years of age
  • Resident senior citizen (below 80 years but above 60 years of age)
  • Resident super senior citizen (above 80 years of age)

The tax is calculated in accordance with the income tax slabs announced by the government of India every year in the budget. The latest income tax slab rates and brackets for the financial year 2018 to 2019 are given below. These tax slabs and rates are as amended by budget 2018. The basic exemption limit depends upon the person’s residential status or his/her age. Let’s take a look –

Income Tax Slab Rate for individual below 60 years of age

           Net Income Range              Income Tax Rate
             Up to 2.5 Lakh                       Nil
        Rs. 2.5 Lakh to 5 Lakh                       5%
        Rs. 5 Lakh to 10 Lakh                      20%
      Rs. 10 Lakh and above                      30%

 

Income Tax Slab Rate for senior citizen (between 60 and 80 years of age)

           Net Income Range             Income Tax Rate
            Up to Rs. 3 Lakh                     Nil
         Rs. 3 Lakh to 5 Lakh                     5%
        Rs. 5 Lakh to 10 Lakh                    20%
        Rs. 10 Lakh and above                    30%

 

Income Tax Slab for Men above 80 years of age (super senior citizen)

         Net Income Range             Income Tax Rate
          Up to Rs. 5 Lakhs                     Nil
    Rs. 5 Lakhs to Rs. 10 Lakhs                    20%
      Rs. 10 Lakhs and above                    30%

 

Income Tax Slab Rate for Women below 60 years of age

          Income Tax Slab          Income Tax Rate
Income up to Rs. 2.5 Lakh                    Nil
Income between Rs. 2.5 Lakhs to 5 Lakh                    5%
Income between Rs. 5 Lakhs to 10 Lakh                   20%
Income above 10 Lakh                   30%

 

Read on to know how much your income tax liability will be as per the proposed announcements in the budget:

Resident individual below the age of 60 years

Net Income Range Income Tax Rates Net taxable income Post budget tax liability Increase in tax due to cess
Up to 2.5 Lakh Nil 2,50,000
Rs. 2.5 Lakh to 5 Lakh 5% 5,00,000 13,000 125
Rs. 5 Lakh to 10 Lakh 20% 10,00,000 1,17,000 1,125
Rs. 10 Lakh and above 30% 15,00,000 2,73,000 2,625

 

Resident individual who is above 60 years or below 80 years

   Net Income Range Income Tax    Rates Net Taxable Income Post Budget Rise in tax due to CESS
Up to Rs. 3 Lakh Nil 3,00,000
Rs. 3 Lakh to 5 Lakh 5% 5,00,000 10,400 100
Rs. 5 Lakh to 10 Lakh 20% 10,00,000 1,14,400 1,100
Rs. 10 Lakh and above 30% 15,00,000 2,70,400 2,600

 

Residential individual who is above 80 years

Net Income Range Income Tax Rates Net Taxable Income Post Budget Increase in tax due to CESS
Up to 5 Lakh Nil 5,00,000
Rs. 5 Lakh to 10 Lakh 20% 10,00,000 1,04,000 1,000
Rs. 10 Lakh and above 30% 15,00,000 2,60,000 2,500

 

These proposals will come into effect from the assessment year (AY 2019 – 2020). The year that immediately follows the financial year is known as assessment year. Tax payers file their income tax return during the assessment year.

So, I hope this article has briefed you thoroughly on Income tax. Also, the Income Tax Department of India has digitalized the whole process of income tax collection and return filing. Thus, it has now become quite convenient for both individuals and businessmen to pay their taxes online, file returns, and track the history of their payment. Let’s take a pledge to pay our taxes on time…

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