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RATES OF INCOME-TAX AND REBATES (Individual)

INCOME-TAX

1) ASSESSMENT YEAR

The income earned from 1.4.2018 to 31.3.2019 i.e. F.Y. 2018-2019 is taxable in Assessment year 2019-2020.
The income earned from 1.4.2019 to 31.3.2020 i.e. F.Y. 2019-2020 is taxable in Assessment year 2020-2021.

The income earned from 1.4.2019 to 31.3.2020 i.e. F.Y. 2019-2020 is taxable in Assessment year 2020-2021.

The income earned from 1.4.2020 to 31.3.2021 i.e. F.Y. 2020-2021 is taxable in Assessment year 2021-2022.

2) DATES WITH DIRECT TAXES

A) Advance tax is to be paid, if necessary by 15th September, 15th December and 15th March every year during the year in which the income is being earned at 30%, 30% and 40% respectively of the total tax due.for the year
B) In case of salaried employees tax is to be deducted at source every month by the employer and if any further tax is payable on account of other sources of income advance tax is to be paid on the above dates for extra tax payable.
C) Return of income is to be filed by 31st July.

RATES OF TAXES for AY 2019-20

I.	Upto Rs.2,50,000	Nil
II.	Above Rs.2,50,000 but upto Rs.5,00,000	5% of excess over Rs.2,50,000
III.	Above Rs.5,00,000 but upto Rs.10,00,000	Rs. 12500 plus 20% of excess over Rs. 5,00,000
IV.	Above Rs.10,00,000	Rs.1,12,500 plus 30% of excess over Rs. 10,00,000

In case of senior citizens, i.e. those who are 60 years and above,exemption limit is Rs.3,00,000/- thereafter, the above limits wiil apply. In effect tax is reduced by Rs. 2,500/-. In case the senior citizen is above 80 years exemption limit is Rs.5,00,000/- and reduction of tax comes to Rs.12,500/. In addition to this, 3% of tax is leviable as education and higher education cess. From FY 2018-19(i.e. AY 2019-20), it will be replaced by Health and Education cess of 4%. Surcharge is leviable at 10% in case of income exceeding Rs 50% and 15% in case of income exceeding Rs.1 Crore with suitable marginal reliefs.

RATES OF TAXES for AY 2020-21

The tax rates for AY 2020-21 are the same as for AY 2019-20. There is no change in the liabilities senior citizens above 60 years and those above 80 years. Health and Education cess of 4% also continues.

Surcharge @10% on income above Rs. 50 lakhs but below Rs. 1 Crore continues. It will also apply on short term capital gains and long term capital gains. If the income is above @ Rs. 2 Crores, the surcharge is 25% and above 5 Crores, the Surcharge is 37%.

RATES OF TAXES for AY 2021-22

The tax rates for AY 2021-22 are the same as for AY 2020-21. There is no change in the liabilities senior citizens above 60 years and those above 80 years. Health and Education cess of 4% also continues.

OPTIONAL TAX REGIME

While there is no change in the existing Income-tax slab rates for individuals, a new tax regime has been proposed under which individuals foregoing exemptions and deductions would be taxed at reduced tax rates.

The exemptions and deductions that would need to be foregone includes inter alia exemptions and deductions claimed widely by individuals including House Rent Allowance, Leave Travel Concession, standard deduction, Deductions under Section 80C, deduction in relation to self-occupied house property, set-off of loss from house property against any other source of income etc.

The Income-tax slab rates applicable under the new tax regime would be:

Slab Rates	Rate of tax
Up to INR 2,50,000	Nil
INR 2,50,001 to INR 5,00,000	5%
INR 5,00,001 to INR 7,50,000	10%
INR 7,50,001 to INR 10,00,000	15%
INR 10,00,001 to INR 12,50,000	20%
INR 12,50,001 to INR 15,00,000	25%
Above 15,00,000	30%

Surcharge and education cess would apply as per existing rates. The new tax regime is optional. Individuals who opt to claim available exemptions/ deductions would be taxed as per the existing rates.

FILING OF RETURN OF INCOME

No return of income is to be filed if your income is below the taxable limit. In order to reduce liablities of small taxpayers it has been provided under section 87A, to allow a rebate of Rs.2500/- in tax, if the income does not exceed Rs.3.5 lakhs and thus no return of income is to be filed. From AY 2020-21, this limit of rebate is increased to Rs.12,500/- if the income does not exceed Rs.5 lakhs,

DEDUCTIONS UNDER SECTION 80C and others

A. Deductions are available from the gross total income in regard to certain payments made by you. Some of the payments qualifying for rebate are as under:

Premium paid towards LIC Policy taken either in your name or in the name of your husband or your child.

Contribution towards statutory provident fund and/or recognized provident fund including Public Provident Fund Scheme 1968. Subscription can be made by you in your name or in the name of your husband or your child.

Contribution towards superannuation fund / National Pension Scheme

Deposits in 10/15 years P.O. Saving Bank (CTD).

Contribution to Unit Linked Insurance Scheme of UTI/LIC etc.

Repayment of loan towards cost of purchase/construction of a new house, provided the loan is taken from Central Government/State Government, Bank, LIC, National Housing Bank or Specified company, co-operative Society etc.

Debentures/equity shares of infrastructure companies, Infrastructures Bonds etc.

Tution fees for children

B. The deduction is available in regard to the above payments subject to a maximum of Rs.1,50,000/-. Deposit under specified pension scheme (NPS) is upto Rs.50,000/-. This deduction is in addition to the limit of Rs.1,50,000/-.

If you take medical insurance for yourself and your family deduction upto Rs.10,000/-.is available as per Section 80D. It is increased to Rs.25,000/- from AY 2019-20. If you take insurance for parents, further sum of Rs.20,000/- is available, if one of them is a senior citizen. From AY 2019-20, the deduction is increased to Rs.50,000/- for you and your family, which can be increased to Rs.1lakh if medical insurance is taken for parents.

C. Deduction u/s 80TTA is available on S/B Interest upto Rs.10,000/-. In case of Senior Citizens, deduction of Rs.50,000/- is available from AY 2019-20 u/s 80TTB in regard to interest from Bank on FD's, S/b a/c etc.

However you must remember that these payments are made from your taxable income and proper care should be taken to issue cheques from your bank account where you deposit your salary, rent etc.

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