Income Tax Slab for Salaried Employees
All about Individual Income Tax Slab
With the financial year 2019-20 coming to a close, it is time to review your tax liabilities and prepare to file your income taxes for the year. While there is still ample time to file your income tax, it is best to learn about the various income tax slabs and rates applicable for FY 2019-20.
In India, every individual, Hindu Undivided Family, business, corporate and other such establishments are required to pay income tax. The administration, collection and recovery of income tax are set according to the regulations under the Income Tax Act, 1961. Even though your income tax is paid on the basis of your monthly earnings, it is calculated annually.
Income Tax Slab for Salaried person (below 60 years of age) and HUF – FY 2019-20
Income Tax Slabs
Rate of Tax
For individuals with income of up to ₹2.5 Lakh
For Individuals with income ranging between ₹2,50,001 and ₹5 Lakh
5% of the total income above ₹2,50,000
For Individuals with income ranging between ₹5,00,001 and ₹10 Lakh
₹12,500+ 20% of the total income above ₹5 Lakh
For Individuals with income above ₹10 Lakh
₹1,12,500+ 30% of their total income above ₹10 Lakh
An additional 4% health and education cess are also applicable on the tax payable calculated according to the above tax slabs for a salaried individual.
Apart from this, an additional surcharge is applicable for individuals with net income above Rs. 50 Lakh. The amount of surcharge applicable can be illustrated as follows:
Surcharge rate on Income Tax
When the net income is higher than ₹50 Lakh but less than ₹1 Crore
When net income is higher than ₹1 Crore and less than ₹2 Crore
When net income is higher than ₹2 Crore but less than ₹5 Crore
When net income is higher than ₹5 Crore
Income Tax Rebate for Salaried Person
According to the Union Budget 2019, salaried individuals can avail an income tax rebate under Section 87A of the Income Tax Act, 1961. This rebate allows you to pay a marginally lower tax amount to individuals earning an income below Rs. 5 Lakh. This rebate allows individuals belonging to the lower-income bracket to reduce their tax liabilities.
Eligibility for salaried individuals to claim the rebate under Section 87A for the financial year 2019-20:
- One must be an Indian resident.
- The total income after all the deductions under Section 80 should not be higher than Rs. 5 Lakh.
This rebate limit is set at Rs. 12,500. This means that if your total tax payable is less than Rs. 12,500, then the total amount will be rebate under Section 87A.
Income Tax Exemptions for Salaried Employees
Salaried individuals below the age of 60 years are eligible to avail various tax exemptions, as specified under Section 80 of the Income Tax Act. Following is a table illustrating the applicability of these income tax exemptions along with their limits:
These are some of the major income tax exemptions for salaried employees in India.
We have further listed some of the income tax benefits in the form of allowances and deductions that can help reduce the tax liability for salaried individuals.
- A standard deduction of up to ₹50,000 in place of the previously available medical reimbursement and transport allowance.
- Leave travel allowance, which can be claimed twice in a block of four years
- Reimbursement for expenses on telephone and mobile used at residence.
- Expenses incurred on food coupons.
- Exemptions on relocation allowance for shifting from one city to another for business purposes.
- Benefits on various facilities provided by the employer like health club facilities, cab facilities, gifts or vouchers
With such allowances and exemptions from income tax for salaried person, you can reduce your tax liabilities to quite an extent. So, before you start filing your income tax returns for the financial year 2019-20, make sure you have a comprehensive idea about all the applicable slabs, exemptions and benefits that you can avail on your tax payments.