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Income Tax slab for assessment year 2018-19

Income Tax is that kind of tax which is levied on the salary or earning of a person by the government. The money which is collected in the form of income tax is used by the Indian government for development of India and to improve defense, infrastructure and some other services. Income tax is considered as the regular income source for the Indian government, and via using this tax Indian government offers a wide variety of services to the residents of India.

The Indian government also uses income tax for paying salary of the government employees.


Income Tax Calculation

The calculation of income tax for a person depends upon different factors like age of the person, amount of income, and kind of income etc. On the basis of total salary of an individual, income tax is calculated. For this, the person is required to declare his total earnings in a year and the total deduction amount. Indian government permits the person to get exemption on different kinds of investment.

Financial Year 2018 – 2019 Income tax slabs

Those persons, who are salaried, there is no modification in the rates of the income tax. Now instead of previous year’s 3% Education Cess, the present rate of health and education cess is 4%. For all the persons who are salaried, standard deduction of amount Rs. 40,000 is applicable for the purpose of medical reimbursement or transportation.

The following slab of income tax will fully assist you in calculation of your total taxable income for various kinds of slabs of income.

  • If the total income of a person is between Rs. 2.5 to 5 Lakhs, then income tax is levied at a rate of 5%.
  • If the total income of a person is around Rs. 3 Lakhs, then there is no any income tax, because of the tax rebate of Rs. 2500.
  • If the total income of a person is more than Rs. 5 Lakhs, then the person gets Rs. 12500 as total benefit of tax.
  • There is no transaction in the form of cash, if the income is more than Rs. 3 Lakhs.
  • Those persons who are paying taxes for the first time, there is no scrutiny unless there is some special case.
  • Those persons whose age is less than 60 years the following slab of income tax is applicable.t
Yearly Income Rates of Tax Education and Health Cess
If the income is about Rs.2,50,000 Nil Nil
Between Rs 2,50,001 to Rs.5,00,000 5% Income Tax 4%
Between Rs.5,00,001 to Rs.10,00,000 20%+ Rs. 12500 Income Tax4%
More than Rs.10,00,000 30%+Rs. 1,12,500 4% of income tax
  • Those persons whose age is more than 60 years and less than 80 years, the following income tax slab is applicable.
Yearly Income Rates of Tax Education and Health Cess
If the income is about Rs.3,00,000 Nil Nil
Between Rs 3,00,001 to Rs.5,00,000 5% Income Tax 4%
Between Rs.5,00,001 to Rs.10,00,000 20%+ Rs. 10,0000 Income Tax4%
More than Rs.10,00,000 30%+Rs. 1,10,000 4% of income tax
  • Those persons whose age is more than 80 years, the following slabs of income tax is applicable.
Yearly Income Rates of Tax Education and Health Cess
If the income is about Rs.5,00,000 Nil Nil
Between Rs 5,00,001 to Rs.10,00,000 20% Income Tax 4%
More than Rs.10,00,000 30%+Rs. 1,10,000 4% of income tax
  • The tax deduction at source is deducted at rates applicable along with education and health cess and surcharge.

Frequently Asked Questions

What is meant by a financial year?

Financial year is defined as that year in which a person earns total income. It begins on 1 st April and finishes on 31 st March.

What is meant by an assessment year?

That year which begins from 1 st day of April and finishes on last date of March (31) and it is instantly following a financial year. For example, if the financial year is from 1 st April 2017 to 31 March, 2018, then the assessment year is from 1 st April, 2018 to 31 st March, 2019. Assessment year is that year in which earned salary is assessed.

To pay income tax, who is liable?

Each person who earns a salary more than the minimum limit of exemption is required to pay income tax. Person means an artificial judicial person, companies, association of persons, local authorities, body of individuals, Hindu undivided families, and individuals etc.

What is the amount of tax which I need to pay?

The tax amount which you need to pay is calculated on the basis of slabs of tax which you belong to. Those individuals who earn a salary of around Rs. 2.5 Lakhs, there is no need to pay any income tax.

Those individuals who earns income between Rs. 2.5 Lakhs to 5 Lakhs, are required to pay 5% income tax. Those individuals who earns income between Rs. 5 Lakhs to Rs. 10 Lakhs, are required to pay 20% income tax.

Those persons who earn more than Rs. 10 Lakhs, are required to pay 30% income tax. These rates are applicable for a person under the age of 60 years.

What is meant by exempt income?

Exempt income is that income, where there is no need to pay any taxes. The Income Tax Act, 1961 provisions provide exemption of tax on various incomes and these are called as exempt income.