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Let us go through time tested tax and investment strategies for FY 2019-20 to achieve your desired results.

1. Investments for Hindu Undivided Family tax file in your kitty
2. Deposits in savings bank account
3. Plan for investments for your minor children  
5. Zero coupon bonds  
6. Tax free bonds
7. Postal instruments   
8. Continue investment in Public Provident Fund     
9. Mutual Fund investments for the family
10. Time to think on investments in NPS
11. New life insurance policies  
12. Rajiv Gandhi Equity Savings Scheme  
13.  Investment in gold & silver  
14. Chill down and relax for next 100 days


Here are seven smart tips to help you save more and reduce taxes.

1. Salary Restructuring
2. Utilizing Section 80C
Section 80C offers a maximum deduction of up to Rs. 1,00,000. Utilize this section to the fullest by investing in any of the available investment options. A few of the options are as follows:

  •    Public Provident Fund
  •    Life Insurance Premium
  •    National Savings Certificate
  •    Equity Linked Savings Scheme
  •    5 year fixed deposits with banks and post office
  •    Tuition fees paid for children's education, up to a maximum of 2 children

3. Options beyond 80C
If you have exhausted your limit of Rs. 1,00,000 under section 80C, here are a few more options:

  • Section 80D - Deduction of Rs. 25,000 for medical insurance of self, spouse and dependent children and Rs. 30,000 for medical insurance of parents above 65 years
  • Section 80G- Donations to specified funds or charitable institutions.

4. House Rent Allowance
5. Tax Saving from Home Loans
6. Leave Travel Allowance
7. Tax on Bonus


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Given below are the three various tables for the latest Income Tax Slabs for the FY 2019-2020:

1. Income Tax Slab for Individual who are below 60 years:

Income Tax slabTax Rate
Up to Rs.2.5 lakh Nil
From Rs.2,50,001 to Rs.5,00,000 5% of the total income that is more than Rs.2.5 lakh + 4% cess
From Rs.5,00,001 to Rs.10,00,000 20% of the total income that is more than Rs.5 lakh + Rs.12,500 + 4% cess
Income of above Rs.10 lakh 30% of the total income that is more than Rs.10 lakh + Rs.1,12,500 + 4% cess

Section 87a of the Income Tax Act
Section 87A of the Income Tax Act provides income rebates for those whose income falls under the 10% tax slab. This is only available for individuals and not for members of Hindu Undivided Families or companies.

Income Tax Rebate under Section 87a:

Section 87a of the Income Tax Act, 1961 was launched to offer some relief for taxpayers who fall under the 10% tax slab. Any individual whose total net income does not cross Rs.5 lakh can claim tax rebate under section 87a of the Income Tax Act, 1961. One can get a tax rebate of up to Rs.2000 under the section 87a. The amount of rebate will be 100% of income tax or Rs.2,000 whichever is lesser.

The rebate under section 87a is available only to individual assessee and not to members of Hindu United Families, AOP/BOI, Firm and Company. Also, the aggregate amount of rebate should not exceed the amount of income tax computed before the rebate on total income of the individual with which they are chargeable for that assessment year.

2. Income Tax Slab between 60-80 years:

Income Tax slabsTax Rate
Up to Rs.3 lakh Nil
From Rs.3,00,001 to Rs.5,00,000 5% of the total income that is more than Rs.3 lakh + 4% cess
From Rs.5,00,001 to Rs.10,00,000 20% of the total income that is more than Rs.5 lakh + Rs.10,500 + 4% cess
Income of above Rs.10 lakh 30% of the total income that is more than Rs.10 lakh + Rs.1,10,000 + 4% cess

3. Income Tax Slabs for individual above 80 years:

Income Tax slabsTax Rate
Up to Rs.5 lakh Nil
From Rs.5,00,001 to Rs.10,00,000 20% of the total income that is more than Rs.5 lakh + 4% cess
Above Rs.10 lakh 30% of the total income that is more than Rs.10 lakh + Rs.1,00,000 + 4% cess

For domestic companies, the tax-slabs depend on the turnover, and it is mentioned below:

TurnoverTax Rate
Gross turnover can be a maximum of Rs.250 crore for the previous year 25%
Gross turnover is more than Rs.250 for the previous year 30%

Apart from the above-mentioned tax rate, an additional surcharge and cess are levied. Given below are the details of the surcharge and the cess that will be levied:

  • Cess: 4% of corporate tax
  • Surcharge: In case the taxable income is more than Rs.1 crore but less than Rs.10 crore, the surcharge that will be levied is 7%. In case the taxable income is more than Rs.10 crore, the surcharge that will be levied is 12%.
  • Non-resident Indians: For non-resident Indians, irrespective of their age, the exemption limit is up to Rs.2.5 lakh.

Important Points

  • In case your net income is more than Rs.50 lakh but less than Rs.1 crore, apart from a 4% cess, a 10% surcharge is also levied. If the net is above Rs.1 crore, a 15% surcharge is levied.
  • Compared to last year’s budget, cess has increased from 3% to 4%.

Income Tax Slabs for Assessment Year 2019-2020

As per the Union Budget of 2018, below are the various slabs according to which income tax is assessed in various categories of income tax assessees.

  • Resident Individuals & Non-Resident Indians
  • Senior Citizens (60 to 80 years)
  • Senior Citizens (above 80 years)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q- Are income tax slabs same for all individuals?

Yes. Income tax slab rates are the same for all individuals within a specific segment such as those aged less than 60 years, senior citizens (60 years to less than 80 years) and super senior citizens (80 years and above) all feature the same income tax slab rates. This holds true irrespective of whether these individuals are salaried, self-employed, unemployed or freelancers.

Q- Are there separate slab rates for men and women?

Not anymore. But earlier there indeed were separate slabs for men and women in India. For example for FY 2010-11, the basic exemption limit for men aged up to 65 years was Rs. 1.6 lakh annually while women aged up to 65 years of age had a higher basic exemption limit of Rs. 1.9 lakh. This is no longer the case as for FY 2018-19.

Q – To whom do the current income tax slab rates apply?

Every individual whether a resident or non-resident no matter what his/her age whether salaried, self-employed or unemployed is covered by the applicable income tax slab rate and minimum exemption limit. Additionally, applicable slab rates also cover various non-individuals such as HUF (Hindu Undivided Family), AOPs (Association of Persons), BOIs (Body of Individuals), firms, LLPs (Limited Liability Partnerships), companies, local authority and other artificial judicial persons are also covered by the income tax slab rates.


Slab Rates on Dividend

Dividend income received by individuals is taxed based on the source of dividend income i.e. the type of entity declaring the dividend income.

  • If aggregate dividend income received during the year is less than Rs. 10 lakh then Tax Rate is    Nil for Individuals/HUFs under Income Tax Section    Section 10(34)
  • If aggregate dividend income received during the year is more than Rs. 10 lakh  Tax Rate is    10% for Individuals/HUFs under Income Tax    Section 115BBDA
Tax Slabs For NRI

For the Financial Year of 2018-19, the tax slabs and rates are as follows:
Up to Rs. 2,50,000  NIL
Rs. 2,50,000 to Rs 5,00,000    5%
Rs. 5,00,000 to Rs. 10,00,000    20%
Above Rs. 10,00,000    30%
*Health and Education Cess – 4%

Income Tax Slab For Doctors
The income tax slab rate are same for all the salaried persons residing in India. Income tax slab rate for doctors are as follows :

Up to ₹ 2,50,000    NIL
₹ 2,50,000 to ₹ 5,00,000    5%
₹ 5,00,000 to ₹ 10,00,000    20%
Over ₹ 10,00,000    30%
Plus Surcharge:

  •     10% of tax where total income exceeds Rs. 50 lakh
  •     15% of tax where total income exceeds Rs. 1 crore
  •     Health & Education cess: 4% of tax plus surcharge

Income Tax slab for Pensioners

Below mentioned is the income tax slab rate for the pensioners:
Income up to Rs 3,00,000*   NIL
Income from Rs 3,00,000 – Rs 5,00,000    5% + Health and Education Cess  4% of Income Tax
Income from Rs 5,00,000 – 10,00,000    20% Health and Education Cess  4% of Income Tax
Income more than Rs 10,00,000    30% + Health and Education Cess  4% of Income Tax

Surcharge: 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.
Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.
*Income tax exemption limit for FY 2019-20 is up to Rs. 3,00,000