Income Tax Slab 2020-21

Income Tax Slab 2020-21 for Super Senior Citizens

As per the Income Tax Act, 1961, tax payers above 80 years of age are super senior citizens. Super senior citizens will be required to pay taxes as per the income tax slab FY 2020-21 & AY 2021-22 (old tax regime) which is mentioned below:

Note: Super senior citizens can also opt for the Income tax slab 2020 under the new tax regime. The Income tax slab rates 2020-21 are same for all tax payers (individuals, senior citizens and super senior citizens).

Also Read: Income Tax Rate for FY 2019-20

Surcharge on Income Tax for Individuals & Senior Citizens

Surcharge is levied on income tax amount if the total income of the assessee exceed a specified income limit. Let’s check the surcharge on income tax for FY 2020-21.

Current Surcharge Rates 2020-21
 

Note: 25% and 37% surcharge on income tax is not levied from taxable income under Section 111A, 112A and 115AD of the Income Tax Act, 1961. In such a case, the surcharge on income tax is 15%. However, there is marginal relief available in certain cases on surcharge of income tax.

Income Tax Slab 2020 For HUF

As per the Union Budget 2020, individuals and HUF can choose either old or new tax regime for the income tax calculation for the FY 2020-21. The Income Tax Slab for FY 2020-21 & AY 2021-22 for HUF is as follows:

New Income Tax Slab 2020 for Domestic Company

Income tax slab 2020-21 for domestic company is fixed at a flat rate of 30%. Check the income tax slab for AY 2020-21 & 2021-22 applicable on domestic company below:

Also Read: What is TDS

A domestic company can opt for special income tax rate for assessment year 2020-21 & 2021-22. Following are the special income tax rate for domestic company:

Surcharge on Income Tax for Domestic Company

Surcharge on income tax for domestic company is levied at 7% of the income tax amount if the taxable income is more than Rs.1 crore and up to Rs.10 crore. The surcharge rate is 12% of such income tax if the taxable income is more than Rs.10 crore. However, there is a marginal relief available on surcharge on income tax in certain cases. Surcharge rate for companies choosing taxability under Section 115BAA, Section 115BAB is 10% irrespective of the total taxable income.

Income Tax Slab 2020-21 for Partnership Firm

Income tax slab rates for partnership firm is fixed at a flat rate of 30% for the financial year 2020-21.

Surcharge on Income Tax for Partnership Firm

Surcharge on Income Tax for Partnership Firm is 12% of tax where the total taxable income is more than Rs.1 crore. However, surcharge on income tax for partnership is subject to marginal relief in certain cases.

Income Tax Slab Comparison for FY 2019-20 vs FY 2018-19

For Individuals:
 

For Senior Citizens:
 

For Super Senior Citizen
 

Old Tax Regime vs. New Tax Regime – Which is Better?

As there are 2 tax regime available in financial year 2020-21, it becomes essential for you to check which one you should opt to reduce the income tax burden. However, if you want to avail new income tax slab 2020 under the new tax regime, you cannot claim up to 70 deductions while calculating your income tax for financial year 2020-21. Let’s take some examples to understand which one is better – old tax regime or the new tax regime under different salary brackets.

Case 1 – Taxable Income Less than Rs.10 lakh

Sneha, a 26-year-old is working with a startup company earning Rs.7 lakh per annum. If she makes investments under Section 80C of Rs.1.5 lakh and assuming pays health insurance premium of Rs.10,000 which he can avail under Section 80D of Income Tax Act, 1961. Let’s check the income tax rate 2020 and payable tax amount for FY 2020-21 (AY 2021-22) under the old tax regime vs new tax regime:
 

*Rebate u/s 87A of the Income Tax Act, 1961 is of Rs.12500 or Actual tax payable, whichever is less. This is applicable only to the individuals with taxable income up to Rs.5 lakh per annum.

Case 2 – Taxable Income Between Rs.10 lakh to Rs.15 lakh

Kartik, a 30-year-old individual is working with a company. He earns a total income of Rs.12,00,000. He is planning to make investments under Section 80C of Rs.1.5 lakh and investments in National Pension System under Section 80CCD of Rs.50,000. He also has a medical insurance for which he is supposed to pay Rs. 20,000 as his premium which he can avail as a deduction under Section 80D of Income Tax Act, 1961. Let’s check the income tax payable for FY 2020-21 (AY 2021-22) under the old tax regime vs new tax regime:
 

Case 3 – Taxable Income More than 15 lakh

Manish, a 37-year-old individual is working with a MNC and earning Rs.16 lakh per annum. He is planning to make certain investments in this financial year to save tax. He is planning to make Rs.1.5 lakh investment under Section 80C and investments in NPS under Section 80CCD of Rs. 50,000. He is also paying health insurance premium of Rs. 25,000 which he can avail as a deduction under Section 80D. He has an ongoing home loan as well. He will avail a deduction of Rs.2 lakh on home loan interest amount as well under Section 24.

Let’s check the income tax payable for FY 2020-21 (AY 2021-22) under the old tax regime vs new tax regime:
 

Income Tax Slab 2020 - FAQs

Q. What are the new tax brackets for 2020?

A. Following are the new income tax slab for FY 2020-21 & AY 2021-22:

*As per Section 87A, individuals having taxable income of up to Rs.5 lakh will be able to avail a rebate of Rs.12500 or 100% of income tax amount, whichever is less. [1]

Q. Are the income tax slab rates under new tax regime same for individuals and senior citizens?

A. Yes, the income tax slab 2020 under the new tax regime is same for all the taxpayers. Unlike the old tax regime, the tax rates under new regime are same for regular individuals, senior citizens (more than 60 years of age to 80 years) and super senior citizens (more than 80 years of age).

Q. Can I avail Standard Deduction in New Tax Regime?

A. No, you cannot avail standard deduction in the new tax regime. Under the Union Budget 2020, you will not be able to avail 70 deductions under the new tax regime.

Q. Is the Income Tax Slab different for men and women?

A. No, income tax slab for FY 2020-21 are same for men and women. Only the senior citizens and super senior citizens get concessional income tax slabs under the old tax regime.

Q. What is 87A in Income Tax?

A. Under Section 87A of the Income Tax Act, 1961, you can avail income tax rebate if your net taxable income is not more than Rs.5 lakh. Section 87A is available only for individuals and HUF. The total rebate under Section 87A is Rs. 12,500 or 100% of income tax amount, whichever is less.