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Income Tax For Salaried Employees

Individual Income Tax Rates

Income tax is another name for direct tax. Profits and gross salaries are subject to income tax liability for the assessee. The Finance Ministry releases the Fiscal Year Budget in February of each year and sends out notices about Tax Slabs and Direct Taxes.

Slab basis Individual income tax rates for FY 19-20 and FY 20-21:

Income up to RS 2,50,000 – Nil Tax.

Between RS.2,50,000 – Rs.5,00,000 – 5%,

Between RS.5,00,000 – Rs.10,00,000 – 20%.

Above Rs.10,00,000 – 30%.

Additional components

  1. Surcharge: The surcharge is applicable at a rate of 10% of the income tax when income is greater than 50 lakh rupees but less than one crore rupees. A 15 percent surcharge is added to the income tax on amounts over 1 crore for income over that level.
  2. Health and Education Cess: The terms "Education Cess" and "Secondary and Higher Education Cess" will be replaced with "Health and Education Cess," which will be assessed at a rate of 4% on the total tax computed, including the surcharge.
  3. The interim budget for 2019 includes a provision to offer a complete tax rebate to people with net taxable incomes up to Rs 5 lakhs (income adjusted after eligible tax deductions). It indicates a change in the highest tax rebate allowed by section 87A, which was formerly set at Rs. 2,500 and is now Rs. 12,500. People who qualify for the tax credit under section 87A and have net taxable income up to Rs. 5 lakhs practically pay no tax.
  4. The assesses may request a little reduction in the surcharge calculation.

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