Income Tax Calculation After Interim Budget 2019

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    Change in your tax liability can be explained further with the following examples, following the Interim Budget 2019. 

    1. Individual residents with income less than Rs 5 lakh per annum:

    Particulars FY 2018-19 (in rupees) FY 2019-20 (in rupees)
    Basic Salary + DA 377,200 377,200
    Other Taxable Allowances 172,800 172,800
    Gross Salary 550,000 550,000
    Standard Deduction (deducted) 40,000 50,000
    Total Income under the head 'salary'  510,000 500,000
    Income Tax 14,500 12,500
    Rebate under section 87A (deducted) 0 12,500
    Total tax payable after Rebate  14,500 0
    Surcharge @10% / 15% 0 0
    Total tax payable after surcharge  14,500 0
    Education Cess @ 4% 580 0
    Total tax, surcharge and education cess  15,080 0

    Total tax saved after budget: Rs 15,080

     

    2. Individual residents with income over Rs 5 lakh but less than Rs 10 lakh per annum

    Particulars FY 2018-19 (in rupees) FY 2019-20 (in rupees)
    Basic Salary + DA 7,77,200 7,77,200
    Other Taxable Allowances 2,22,800 2,22,800
    Gross Salary 10,00,000 10,00,000
    Standard Deduction (deducted) 40,000 50,000
    Total Income under the head 'salary'  9,60,000 9,50,000
    Income Tax 1,04,500 1,02,500
    Rebate under section 87A (deducted) 0 0
    Total tax payable after Rebate  1,04,500 1,02,500
    Surcharge @10% / 15% 0 0
    Total tax payable after surcharge  1,04,500 1,02,500
    Education Cess @ 4% 4,180 4,100
    Total tax, surcharge and education cess  1,08,680 1,06,600

    Total tax saved after budget: Rs 2,080

    3. Individual residents with income over Rs 10 lakh but less than Rs 50 lakh per annum

    Particulars FY 2018-19 (in rupees) FY 2019-20 (in rupees)
    Basic Salary + DA 17,77,200 17,77,200
    Other Taxable Allowances 12,22,800 12,22,800
    Gross Salary 30,00,000 30,00,000
    Standard Deduction (deducted) 40,000 50,000
    Total Income under the head 'salary'  29,60,000 29,50,000
    Income Tax 7,00,500 6,97,500
    Rebate under section 87A (deducted) 0 0
    Total tax payable after Rebate  7,00,500 6,97,500
    Surcharge @10% / 15% 0 0
    Total tax payable after surcharge  7,00,500 6,97,500
    Education Cess @ 4% 28020 27900
    Total tax, surcharge and education cess  7,28,520 7,25,400

    Total tax saved after budget: Rs 3,120

    The main take away for salaried individuals from the Budget 2019 was the reduced income tax burden. Here is a clear clarification on how the tax on your income for the financial year 2019-20 will be computed.

    • Standard deduction has been increased from Rs 40,000 to Rs 50,000
    • No income tax will be payable by those who earn an annual income less than Rs 5 lakhs. A tax rebate was announced, which means if your income is Rs 6.5 lakh, you will not have to pay tax as you can additional Rs 1.5 lakhs tax benefit for investments exempt from tax under sec 80C.
    Income Tax Calculation After Interim Budget 2019
    These changes will mean that after a rebate, only those in the upper tax brackets would gain benefit to the extent of the standard deduction.

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