Income tax accounts for a major part of the government's revenue and salaried individuals form a significant chunk of the overall taxpayers in the country.
There are various income tax slabs specified by the government for different categories of taxpayers according to their level of income.
Here's all you need to know about the income tax slabs and rates for individuals.
What are income tax slabs?
Income tax slabs are predetermined tax rates on the basis of which the income of an individual is assessed. Tax rates for individuals are decided based on the slabs they fall under. Tax slabs give the threshold/limit beyond which certain tax rates are applicable.
Income tax slabs left unchanged for FY 2019-20
In the Interim Budget 2019, the Finance Minister left the income tax slabs and rates unchanged for FY 2019-20. However, it was also announced that individual taxpayers with an income of up to Rs. 5 lakh per annum would get a full tax rebate.
So, for FY 2019-20, the tax slabs for FY 2018-19 (AY 2019-20) would be applicable.
Income tax slabs and tax rates for FY 2019-20
For FY 2019-20, any individual with an income of up to Rs. 2.5 lakh per annum is exempt from personal income tax.
However, those with an income between Rs. 2.5-5 lakh per annum need to pay 5% tax.
Income between Rs. 5-10 lakh/annum is taxed at 20%. An income higher than Rs. 10 lakh per annum attracts 30% tax.
Standard deduction for salaried individuals
This year, during the Interim Budget presentation, the Finance Minister had also hiked the standard deduction for salaried people by Rs. 10,000 from Rs. 40,000 to Rs. 50,000. However, there are no changes in other deductions.