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What is the Tax Exemption Limit in India?
As per the Income Tax Act, 1961, income is widely defined as any earning through salary, pension, rent, profits of business or profession, profit from sale of an asset, interest, dividends and/or royalty.
What are the various heads of Income?
Following are various Income heads: -
- Salary
- House Property
- Profits and gains from Business or Profession
- Capital Gains
- Other sources
It is essential for every individual and organization in this country to pay taxes on the income that they earn. However, for certain individuals, it is not necessary to pay any tax at all. This may be because the individual is either a minor or not earning an income that can be taxed ,as per the Income Tax Act, 1961. The provisions of this act have categorized taxpayers in India into 3 kinds –
- Individuals, Hindu Undivided Family (HUF), Association of Persons (AOP) and Body of Individuals (BOI)
- Firms
- Companies
What are the tax slabs applicable for A.Y. 2019-20?
Income tax slab for individual taxpayers & HUF (below 60 years old)
| Income Slab | Tax Rate |
| Income up to Rs.2.5 lakh* | No Tax |
| Income from Rs.2.5 lakh – Rs.5 lakh | No Tax |
| Income from Rs.5 lakh – Rs.10 lakh | 20% |
| Income more than Rs.10 lakh | 30% |
| Surcharge | 10% of income tax, where total income is between Rs. 50 lakh and Rs.1 crore. 15% of income tax, where total income exceeds Rs.1 crore. |
| Cess | 4% on total of income tax + surcharge. |
Income tax slab for individual taxpayers & HUF (60 years old or more but less than 80 years old)
| Income Slab | Tax Rate |
| Income up to Rs.3 lakh* | No Tax |
| Income from Rs.3 lakh – Rs.5 lakh | No Tax |
| Income from Rs.5 lakh – Rs.10 lakh | 20% |
| Income more than Rs.10 lakh | 30% |
| Surcharge | 10% of income tax, where total income is between Rs. 50 lakh and Rs.1 crore. 15% of income tax, where total income exceeds Rs.1 crore. |
| Cess | 4% on total of income tax + surcharge. |
Income tax slab for individual taxpayers & HUF (below 80 years old)
| Income Slab | Tax Rate |
| Income up to Rs.2.5 lakh* | No Tax |
| Income from Rs.2.5 lakh – Rs.5 lakh | No Tax |
| Income from Rs.5 lakh – Rs.10 lakh | 20% |
| Income more than Rs.10 lakh | 30% |
| Surcharge | 10% of income tax, where total income is between Rs. 50 lakh and Rs.1 crore. 15% of income tax, where total income exceeds Rs.1 crore. |
| Cess | 4% on total of income tax + surcharge. |
The Income Tax Act, 1961, states that there will be an additional surcharge of 10% applied in certain cases where the income of an individual, HUF, AOP or BOI falls between Rs. 50 lakhs and Rs. 1 crore. Furthermore, an additional surcharge of 15% may be applied to those whose annual income is more than Rs. 1 crore. Therefore, it is highly advisable to verify the tax slab that you fall under before you file your income tax return. After all, who wants to pay more taxes than necessary.
