How To Calculate Income Tax For Assessment Year 2020-21
Tuesday, February 5, 2019 IST
From the rebate on income up to Rs. 5 lakh to a 25 per cent hike in standard deduction, here's all you need to know to know your income tax liability.
From the announcement of a full tax rebate on an annual income up to Rs. 5 lakh to a 25 per cent hike in standard deduction applicable to the salaried and pensioners, the Budget 2019 proposes few key changes to income tax laws. Once the new income tax rules come into effect, that is, from Assessment Year 2020-21, individual assessees' tax outgo will change accordingly. Financial experts have shared few examples to explain the changes in income tax liability as per the proposed changes in laws.
But before that, here's a brief description of two noteworthy changes in income tax laws proposed in the February 1 Budget:
*Full tax rebate on annual personal income up to Rs. 5 lakh; in other cases, income tax rates/slabs remain unchanged
*Standard deduction limit (applicable to employees and pensioners) raised from Rs. 40,000 (
Budget 2018) to Rs. 50,000 (
Budget 2019)
Here are some of those examples underlining the changes in income tax liability from assessment year 2020-21:
|
Budget 2019 tax calculation examples |
|
Taxable annual income in rupees (after adjusting deductions) |
3,50,000 |
4,00,000 |
5,00,000 |
10,00,000 |
|
Tax |
5,000 (@ 5% on 1,00,000) |
7,500 (@ 5% on 1,50,000) |
12,500 (@ 5% on 2,50,000) |
1,12,500 (@5% on 2,50,000, 20% on 5,00,000) |
|
Rebate under Section 87A of I-T Act |
5,000 |
7,500 |
12,500 |
NA |
|
Tax liability |
0 |
0 |
0 |
1,12,500 |
|
Cess @ 4% |
0 |
0 |
0 |
4,500 |
|
Tax payable (after cess) |
0 |
0 |
0 |
1,17,000 |
|
Budget 2018 examples |
|
Taxable income |
3,50,000 |
4,00,000 |
5,00,000 |
10,00,000 |
|
Tax |
5,000 |
7,500 |
12,500 |
1,12,500 |
|
Rebate |
2,500 |
NA |
NA |
NA |
|
Balance Tax |
2,500 |
7,500 |
12,500 |
1,12,500 |
|
Cess |
100 |
300 |
500 |
4,500 |
|
Tax payable |
2,600 |
7,800 |
13,000 |
1,17,000 |
Related Topics
Trending News & Articles
Lung cancer is usually not noticeable during the early stages. Most people are diagnosed when the disease is at an advanced stage. According to Cancer.org, it is ...
Recently posted . 9K views . 2 min read
The health benefits of wood apple include [1] relief from constipation, indigestion, peptic ulcer, piles, respiratory problems, diarrhea, and dysentery. It also b...
Recently posted . 6K views . 2 min read
Bael, also known as the “Wood Apple”, is a species native to India. The bael tree is considered to be sacred to the Hindus. A famous drink known as sh...
Recently posted . 5K views . 2 min read
The scientists likewise shared how much liquor an individual can drink prior to facing overabundance risk challenges their wellbeing, contrasted with somebody who...
Recently posted . 5K views . 1 min read
More in National
Before we begin, can we just say that 2019 is one such year where anything bizarre is going to put you on the news? Read more to know why and maybe find out your ow...
Recently posted. 1K views . 1 min read
Everyone has heard of the classic exercises: push-ups, pull-ups, bench presses, squats, and ab crunches. These exercises are tried and true, and they have been prov...
Recently posted. 987 views . 1 min read
Body image issues are not just affecting adults and teenagers, even children as young as 8 or 9 are facing it, says a new study. It also found a link between horm...
Recently posted. 1K views . 1 min read
Recently posted . 1K views
Recently posted . 1K views
Recently posted . 2K views
Recently posted . 2K views
Recently posted . 2K views . 121 min read
Recently posted . 2K views . 89 min read
What To Do Now To Look Youthful Forever
Recently posted. 1K views . 0 min read
Let's normalize menstruation for once!
Recently posted. 1K views . 0 min read