Income Tax Slab rate / Surcharge & Education and Health Cess for AY 2019-20

(1)    Individual/ HUF/ AOP / BOI and every artificial juridical persons:

• For resident individuals of the age of 60 years or more but less than 80 years at any time during the previous.

• For resident individuals of the age of 80 years or more at any time during the previous year

(4) Circular No. 28/2016, dated 27-07-2016

Clarification regarding attaining prescribed age of 60 years/80 years on 31^st March itself, in case of senior/very senior citizens whose date of birth falls on 1st April

• The Supreme Court in the case of Prabhu Dayal Sesma State of Rajasthan &, another 1986, AIR, 1948 observed that while counting the age of the person, whole of the day should be reckoned and it starts from 12 o’clock in the midnight and he attains the specified age on the day preceding, the anniversary of his birthday.

• The CBDT has, vide this Circular, clarified that a person born on 1st April would be considered to have attained a particular age on 31st March, the day preceding the anniversary of his
• Therefore, a resident individual whose 60th birthday / 80^th birthday falls on 1st April, 2019, would be treated as having attained the age of 60 years in the P.Y.2018-19, and would be eligible for higher basic exemption limit of Rs. 3 lakh/Rs. 5 lakh in computing his tax liability for Y.2019-20.

The rates of surcharge applicable for A.Y. 2019-20 are as follows –

The above surcharge is subject to a Marginal relief Why there is a need for marginal relief?

Consider Example (A) and (B)

Example : (A) Taxpayer : Mr. Active, 54 years having total income of Rs.50,00,000.

Example : (B) Taxpayer: Mr. Passive, 55 years having total income of Rs.50,50,000.

Now, as compared to Example (A), in Example (B), income is increased by Rs. 50,000, while tax is increased by Rs.1,47,750, therefore, there is a need for marginal relief.

Under marginal relief, tax liability of Rs. 50,50,000 is restricted as under:-

Tax on 50,50,000                                                               = Tax on 50,00,000 + (Total Income – Rs.50,00,000)

= Tax on 50,00,000+ (50,50,000-Rs.50,00,000)

= 13,12,500 + 50,000

= 13,62,500

The above tax is increased by health and education cess

J EASY STEPS to compute Final tax liability when total income of Individual ranges between Rs.50,00,001 to Rs. 1,00,00,000.

Step 1: Find out regular tax liability + Surcharge (Ignore education cess)

Step 2: Find out tax on 50,00,000 + (Total Income-50,00,000)

Step 3: Step 1 or Step 2 whichever is lower

Step 4: Add Health and Education Cess

“Health and Education cess (HEC)” is to be calculated at the rate of 4% of income-tax and surcharge. HEC is applicable to all assessees i.e., individuals, HUFs, AOP/BOIs, co-operative societies, firms, LLPs, local authorities and companies.

The format of computation of HEC is as under:–

Note: No marginal relief would be available in respect of such cess.