income tax slabs for the financial year 2020-2021

The budget of Financial Year 2020-2021 was presented on 1st February, 2020 by our Finance Minister, Ms. Nirmala Sitharaman and it came effective from 1st April, 2020. According to the effective budget, the salaried employees and HUF eligible to pay tax are given an option to opt between the existing tax regime (See: Income Tax Slabs for the Financial Year 2019-2020) and the new tax regime. However, If the individual opts for the new tax regime, then the taxpayer will have to forego certain existing exemptions. The new tax regime is as follows:

Tax Slab For Taxpayers

Income (per annum)

New Tax Rate (FY 2020-2021)

Up to Rs. 2.5 lacs

NIL

Above Rs. 2.5 lacs but below Rs. 5 lacs

5% + 4% cess

Above Rs. 5 lacs but below Rs. 7.5 lacs

10% + 4% cess

Above Rs. 7.5 lacs but below Rs. 10 lacs

15% + 4% cess

Above Rs. 10 lacs but below Rs. 12.5 lacs

20% + 4% cess

Above Rs. 12.5 lacs but below Rs. 15 lacs

25% + 4% cess

Above Rs.15 lacs but below Rs. 50 lacs

30% + 4% cess

Above Rs. 50 lacs but below Rs. 1 crore

30% + 10% surcharge + 4% cess

Above Rs. 1 crore but below Rs. 2 crores

30% + 15% surcharge + 4% cess

Above Rs. 2 crore but below Rs. 5 crores

30% + 25% surcharge + 4% cess

Above Rs. 5 crores

30% + 37% surcharge + 4% cess

Please note that the new tax regime is not differentiated on the basis of age group.

income tax slab for domestic companies

A domestic company is taxable at 30%. However, the tax rate is 25% if turnover or gross receipt of the company does not exceed Rs. 400 crore in the previous year.

Particulars

Tax Rate (FY 2020-2021)

If company opted section 115BA

25%

If company opted for section 115BAA

22%

If company opted for section 115BAB

15%

Any other domestic company

30%

Income Tax Slabs For Partnership Firm​

Income range (per annum)

Tax Rate (FY 2020-2021)

Up to Rs. 1 crore

30% + 4% cess

Above Rs. 1 crore

30% + 12% surcharge + 4% cess

Income Tax Slabs for Local Authority

Income (per annum)

Tax Rate (FY 2020-21)

Up to Rs. 1 crore

30% + 4% cess

Above Rs. 1 crore

30% + 12% surcharge + 4% cess

exemptions granted in the financial year 2020-2021

The income tax deductions still available in the new regime include:

  • Death-cum-retirement benefit;
  • Commutations of pensions;
  • Leave encashment on retirement;
  • Amount received on Voluntary Retirement Scheme (VRS) up to Rs 5 lacs;
  • Employee Provident Fund money;
  • Money received as scholarship for education;
  • Cash received as awards constituted in public interest, and
  • Short-term withdrawals and maturity amount from the National Pension Scheme
  •  

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