Income Tax Slab Rates For Govt. Employees FY 2019-20 AY 2020-21

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Budget 2019 has provided cheerful moments for govt. employees.we have thoroughly analysed the new income tax slab rates fy 2019-20 with examples below.

Budget 2019 key features

  • Persons having  gross total income up to rs. 500000,need not to pay any tax.
  • Standard deduction increased from rs.40000 to 50000.
  • Income tax slab rates remain unchanged.
  • 0-250000-nill,[email protected]%,[email protected]% and 1000001-onwards [email protected]%.
  • Health education cess is 4%.
  • Income tax rebate u/s 87A increased from rs. 2500 to 12500,if your total income (that is the income after deduction under sections 80c-80u) is 5 lakhs.
  • Surcharge @10% if Total income is rs 5000001-10000000.
  • And surcharge @15% if total income exceeds one crore.
  • TDS limit increases from rs 10,000 to 40,000 under section 80TTA .

Steps to calculate income tax for govt.employees fy 2019-20 AY 2020-21

ACCORDING TO UNION BUDGET 2019

We take a simple example to calculate income tax for govt. Employees under new income tax slab rates for fy 2019-20.

Example to calculate income tax for a salaried employee if income is rs 500000(5 lakh)

Assume that your gross income (income from salary +income from house property+income from other sources)  is rs 500000.

Also standard deduction of rs 50,000 applies.

Thus 500000 -50,000=450,000

Now suppose you avail 150,000 rs under section 80c.

So 450000-150,000=300,000.

Now we know 0-250,000=nill tax.

Hence 300,000-250,000=50,000.

So 5% of 50,000 is 25,00

Now according to new union budget 2019

There will be income tax rebate of rs 12,500 under section 87A, if your taxable income(your salary-standard deduction-deductions u/s 80c-80u) is rs. 5 lakhs or less.

Hence in this example our total or taxable income is rs 3,00,000.

So finally in this case on rs 25,00 ,your tax liability is rs 0.

If gross salary of employee is 7 lakhs

Suppose gross salary of an employee=700000

Now deduct standard deduction of rs. 50,000.

Hence 700000-50,000=650,000.

Suppose your tax saving from 80c-80U=150,000.

Thus 650,000-150,000=500000.

So your total taxable income=500000.

Now according to tax slab rates for fy 2019-20

0-250000= rs. 0 tax.250,[email protected]% tax.

And 20% tax rates applicable,from 500000-10,00000.

So your tax liability becomes rs. 12,500.

Now rebate u/s 87A of rs. 12,500 is applicable.

Finally your tax liability= 12,500-12,500=0.

If gross salary of employee is 10 lakhs

Following the above examples we calculate your tax.

Gross salary=10,00000

Standard deduction of rs 50,000 applicable.

So 10,00000-50,000=950,000.

Deduct. Your savings from 89C-80U=150,000(Suppose these are 150,000.it may varies in your case.)

Hence 950,000-150,000=8,00,000.

Further, we devide your taxable income of rs 8,00,000 as per tax slab rates.

0-250,000=0 tax +250,001-500000 = rs. 12,500 +500000-800000 = rs. 60,000.

So your final tax becomes 12,500+60,000=72,500.

Now in this case your total income after availing all savings is 8,00,000,which crosses rs 5,00,000.

Hence you can not avail rs. 12,500 tax rebate under section 87A.

Now health education cess 4% of rs. 72,500=2900.

So 72,500+2900=75,400

Finally your tax liability = rs. 0

Point of concern

It may be noted here that most of the people are misleading regarding rs 5 lakhs tax free income.

Up to  rs 5 lakhs ,12,500 is the tax rebate on the condition that if your total income after availing all savings is rs 5 lakhs.

And if it is not,then you can not get huge tax rebate of rs 12,500.

Final words

Finally we can say that in the union budget 2019-20,only middle class salary class is getting tax benefits.

But on some critical conditions,which we have discussed above.

If you have found this article informative,then do share it.

Let me know in the comment section,if you have any query contact us 00919877421209.

Income tax calculator for govt employees fy 2018-19

Kuldeep Singh
 

is a professional blogger,teacher and income tax expert

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