Budget announcement has brought cheers to the Indian Middle Class, farmers and labourers. Among all the major announcements income tax 'rebate' for people with income up to Rs 5 lakh per year was the major one. Besides, the people who have an annual income up to Rs 5 lakh as they will get the full rebate, those with the gross income up to Rs 6.50 lakh can also save their income if they make the right investments in provident funds, specified savings, insurance etc.
Anyone with taxable income of up to Rs 5 lakh will pay no tax, because whatever the tax amount, that much rebate will be given to the tax payer. Thus the liability of the person becomes null. This is inclusive of cess that is 4 per cent. As per the present income system, if the taxable income is between Rs 2.5 lakh and Rs 5 lakh, the tax would be up to Rs 12,500 and when you add 4 per cent cess, the total tax amount will be up to Rs 13,000. Now, this amount will be given as rebate. Thus the tax liability becomes zero.
If we consider the gross income, it could be even higher than Rs 5 lakh; it could be Rs 6 lakh, Rs 7 lakh, Rs 8 lakh. As the gross income is higher, the person's also have the capacity to invest in Section 80 (C) instruments such as provident fund, specified savings schemes and life insurance. Anyone can receive the benefit if their income is higher and invest a corresponding amount.
Here are the latest income tax slabs for the FY2019-20:
| Income tax slabs for resident Individual below 60 years of age | |
|---|---|
| Taxable income slabs | Income tax rates and cess |
| Up to Rs 2.5 lakh | Nil |
| Rs 2,50,001 to Rs 5,00,000 | 5% of (Total income minus Rs 2,50,000) + 4% cess |
| Rs 5,00,001 to Rs 10,00,000 | Rs 12,500 + 20% of (Total income minus Rs 5,00,000) + 4% cess |
| Rs 10,00,001 and above | Rs 1,12,500 + 30% of (Total income minus Rs 10,00,000) + 4% cess |
| Income tax slabs for resident individual between 60 and 80 years of age (Senior Citizen) | |
|---|---|
| Taxable income slabs | Income tax rates and cess |
| Up to Rs 3 lakh | Nil |
| Rs 3,00,001 to Rs 5,00,000 | 5% of (Total income minus Rs 3,00,000) + 4% cess |
| Rs 5,00,001 to Rs 10,00,000 | Rs 10,000 + 20% of (Total income minus Rs 5,00,000) + 4% cess |
| Rs 10,00,001 and above | Rs 1,10,000 + 30% of (Total income minus Rs 10,00,000) + 4% cess |
| Income tax slabs for resident individual above 80 years of age (Super Senior Citizen) | |
|---|---|
| Taxable income slabs | Income tax rates and cess |
| Up to Rs 5 lakh | Nil |
| Rs 5,00,001 to Rs 10,00,000 | 20% of (Total income minus Rs 5,00,000) + 4% cess |
| Rs 10,00,001 and above | Rs 1,00,000 + 30% of (Total income minus Rs 10,00,000) + 4% cess |
All the aforementioned announcement in the Budget 2019-20 are subject to the approval by Lok Sabha in the Budget session 2019 which will be held till 13th February 2019.