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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:

ParticularsFY 2018-19 (in rupees)FY 2019-20 (in rupees)
Basic Salary + DA377,200377,200
Other Taxable Allowances172,800172,800
Gross Salary550,000550,000
Standard Deduction (deducted)40,00050,000
Total Income under the head 'salary' 510,000500,000
Income Tax14,50012,500
Rebate under section 87A (deducted)012,500
Total tax payable after Rebate 14,5000
Surcharge @10% / 15%00
Total tax payable after surcharge 14,5000
Education Cess @ 4%5800
Total tax, surcharge and education cess 15,0800

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

ParticularsFY 2018-19 (in rupees)FY 2019-20 (in rupees)
Basic Salary + DA7,77,2007,77,200
Other Taxable Allowances2,22,8002,22,800
Gross Salary10,00,00010,00,000
Standard Deduction (deducted)40,00050,000
Total Income under the head 'salary' 9,60,0009,50,000
Income Tax1,04,5001,02,500
Rebate under section 87A (deducted)00
Total tax payable after Rebate 1,04,5001,02,500
Surcharge @10% / 15%00
Total tax payable after surcharge 1,04,5001,02,500
Education Cess @ 4%4,1804,100
Total tax, surcharge and education cess 1,08,6801,06,600

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

ParticularsFY 2018-19 (in rupees)FY 2019-20 (in rupees)
Basic Salary + DA17,77,20017,77,200
Other Taxable Allowances12,22,80012,22,800
Gross Salary30,00,00030,00,000
Standard Deduction (deducted)40,00050,000
Total Income under the head 'salary' 29,60,00029,50,000
Income Tax7,00,5006,97,500
Rebate under section 87A (deducted)00
Total tax payable after Rebate 7,00,5006,97,500
Surcharge @10% / 15%00
Total tax payable after surcharge 7,00,5006,97,500
Education Cess @ 4%2802027900
Total tax, surcharge and education cess 7,28,5207,25,400

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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