Under existing rules of the Income Tax Act, 1961, resident Indian and non-resident Indians (NRIs) are taxed according to the same income tax slabs and rates. The following are the IT slabs and slab rates for AY 2019-20 in case of resident and non-resident Indians aged less than 60 years:
Income Threshold Tax rate applicable
Up to ₹ 2,50,000 – NIL
₹ 2,50,001 to ₹ 5,00,000 – 5% on income exceeding Rs. 2.5 lakh(max. Rs. 12,500)
₹ 5,00,001 to ₹ 10,00,000 – 20% on income exceeding Rs. 5 lakh(max. Rs. 1 lakh) + Rs. 12,500
Over ₹ 10,00,001 – 30% on income exceeding Rs. 10 lakh+ Rs. 1 lakh + Rs. 12,500
1. Surcharge: In case income is more than ₹ 50 lakhs and less than ₹ 1 crore, the surcharge is applicable at a rate of 10% of the income tax. For income, more than ₹1 crore, a surcharge of 15% is applicable on income tax. For income, more than ₹ 2 crore, a surcharge of 30% is applicable on income tax and for income, more than ₹ 5 crore, a surcharge of 37% is applicable on income tax.
2. Health and Education Cess: “Education Cess” and “Secondary and Higher Education Cess” will be replaced by “Health and Education Cess” at the rate of 4%, on the amount of tax computed, inclusive of surcharge.
3. The final budget 2019 has provisioned to provide a full tax rebate to individuals having a net taxable income (income adjusted after eligible tax deductions) upto Rs 5lakhs. It means that the maximum tax rebate provided under section 87A has been increased from Rs. 2,500 to Rs. 12,500. Individuals having net taxable income upto Rs. 5lakhs can claim the tax rebate under 87A and thus effectively pay zero tax.