Budget 2018: Income Tax Rates Applicable to AY 2019-20

Budget 2018

The Finance Minister Arun Jaitley today proposed the union budget 2018, wherein no change has been proposed in the tax slabs.

While pronouncing the Budget, the Minister said that “Government has made many positive changes in the personal income tax rates applicable to individuals in the last three years; therefore I do not wish to make any changes”.

Contrary to expectations, Finance Minister Arun Jaitley announced that there will be no change in personal income tax slabs.

This budget did not bring any change in the maximum exemption limit in the income tax. Similarly the rate of tax applicable to income slab is unchanged. However, a standard deduction of Rs. 40,000/- has been given to the salaried class in lieu of the present exemptions.

The Education Cess and Secondary and Higher Education Cess are replaced by new term called “Health and Education Cess” carrying a rate 4% from the earlier rate of 3%.

Tax Rate* for an individual for the A.Y. 2019-20
Income Rates of Income-tax
Individual (Age less than 60 Years) Senior Citizen (Age above 60 Years) Super Senior Citizen (Age above 80 Years)
1 Up to Rs. 2,50,000 Nil Nil Nil
2 Rs. 2,50,000 to Rs. 3,00,000 5% Nil Nil
3 Rs. 3,00,000 to Rs. 5,00,000 5% 5% Nil
4 Rs. 5,00,000 to Rs. 10,00,000 20% 20% 20%
5 Above Rs. 10,00,000 30% 30% 30%

*The above rates are exclusive of surcharge and cess.

A resident individual, whose taxable income does not exceed Rs. 3, 50,000, can claim a tax rebate under section 87A. The amount of rebate shall be lower of 100% of income-tax or Rs. 2,500.

Tax Rates* for Corporate Assessee for the A.Y. 2019-20
Status of Taxpayer Rates of income-tax
1 Firms/Local Authority 30%
2 Domestic Company 30%/25%#
3 Foreign Company 40%
# Tax rate is 25% if turnover or gross receipts of the domestic company in the previous year 2016-17 doesn’t exceed Rs. 250 crore

*The above rates are exclusive of surcharge and cess.

Tax Rates* for Co-operatives Societies for the A.Y. 2019-20
Income Rates of income-tax
1 Up to Rs. 10,000 10%
2 Rs.10,000 – Rs.20,000 20%
3 Above Rs. 20,000 30%

*The above rates are exclusive of surcharge and cess.

*Rates of Surcharge
Particulars Taxable Income
50 Lacs to 1 Crore 1 Crore to 10 Crores Exceeding 10 Crores
Individuals/HUF 10% 15% 15%
Firm/ Local Authority/ Co-operative Society Nil 12% 12%
Domestic Company Nil 7% 12%
Foreign Company Nil 2% 5%
Co-operative Societies Nil 12% 12%

*The health &education cess at the rate of 4% shall be computed on aggregate of Income-Tax and Surcharge.

To Read the full text of the Finance Bill, 2018 CLICK HERE