Many of us have the confusion of understanding that there is no tax on an individual whose income is up to Rs.5,00,000 Proposed in the Budget 2019. Going by the Budget 2019 proposals, a salaried individual with gross total income up to Rs 7.75 lakh can invest in various tax saving avenues and avail of different deductions to reduce taxable income to Rs 5 lakh and consequently pay no tax for FY 2019-20. Such a person would be saving tax of Rs 15080 compared to tax payable in current FY 2018-19 .There are so many positive things in the proposed budget but i want to clear that there is no change in Income Tax Slab rates for FY 2019-20. Then question is that how can be it is judged that there is no tax on an individual whose income is up to Rs.5,00,000?
The reason is the change in Sec.87A in the Budget 2019. Earlier the limit under Sec.87A was up to Rs.3,50,000 and the deduction permissible was Rs.2,500. Now it is increased to Rs.5,00,000 and the deduction available is Rs.12,500.
Latest Income Tax Slab Rates FY 2019-20 (AY 2020-21)
Income Slab Individuals Senior Citizens Super Senior Citizens
(Aged below 60 years) (Aged 60 years and above (Aged 80 years and above)
but below 80 years)
Up to Rs.2,50,000 NIL NIL NIL
Rs.3,00,000 5% NIL NIL
Rs.5,00,000 5% 5% NIL
Rs.10,00,000 20% 20% 20%
Rs.10,00,001 30% 30% 30% and above
Note: – Along with the applicable taxes, you have to additional surcharges and Health and Education cess at below rates.
• 10% surcharge on income tax if the total income exceeds Rs.50 Lakhs but below Rs.1 Cr.
• 15% surcharge on income tax if the total income exceeds Rs.1 Cr.
• Health and Education cess : 4% cess on income tax including surcharge. This Health and Education Cess replaced the earlier 2% Education Cess and 1% Secondary and Higher Education Cess from Budget 2018
Revised Tax Rebate under Sec.87A after Budget 2019
1. You must be a RESIDENT INDIVIDUAL
2. Your Total Income, after Deductions, (like under Section 80C) is equal to or less than Rs.5,00,000 (Earlier it was Rs.3,50,000).
3. The rebate is limited to Rs.12,500 (Earlier it was Rs.2,500).
It means if your total tax payable is lower than Rs.12,500, the amount will eligible for a rebate under Sec.87A. Do remember that the rebate should be applied to the total tax before adding the education cess (4%).