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
More in