FY 2019-20: How to calculate Income Tax on total income?

FY 2019-20: How to calculate Income Tax on total income?

Income Tax Slab Rates FY 2019-20 (AY 2020-21) . 

How to calculate the tax on our total income and how much is the tax benefits.

If you are under 30% Tax Slab and below 60 years of age

Let us say your next taxable income (after all deductions like  Section 80C , 80D and all) Rs.15,00,000.

Up to Rs.2,50,000- NIL

Rs.2,50,001 to Rs.5,00,000- Rs.12,500  at 5%.

Rs.5,00,001 to Rs.10,00,000- Rs.1,00,000 at 20%

Rs.10,00,001 and above (in this case Rs.15,00,000)=Rs.1,50,000 at 30%.

So total tax will be Rs.12,500 + Rs.1,00,000 + Rs.1,50,000 = Rs.2,62,500.

If you are under 20% Tax Slab and below 60 years of age

Let us say your next taxable income (after all deductions like Section 80C, 80D  and all) Rs.7,00,000.

Up to Rs.2,50,000 - NIL

Rs.2,50,001 to Rs.5,00,000 - Rs.12,500 at 5%.

Rs.5,00,001 to Rs.7,00,000 - Rs.40,000 at 20%

Therefore, the total tax will be Rs.12,500 + Rs.40,000 = Rs.52,500.

If you are under 10% Tax Slab and below 60 years of age

Let us say your income is Rs.4,00,000

Up to Rs. 2,50,000 - NIL

Rs.2,50,001 to Rs.4,00,000 - Rs.7,500 at 5%.

However, using Sec.87A of IT Act, your tax liability will be ZERO.

An individual who is resident Indian and whose total income does not exceed Rs. 5,00,000 is entitled to claim rebate under section 87A up to Rs.12,500.

You noticed that there is no change in tax slabs (5%, 20%, 30%). However, how can be it is zero tax for those who fall under up to Rs.5 lakh income?

However considering the revised amendment to Sec.87A, your tax liability up to Rs.5,00,000 turn to be zero.

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