The budget of Financial Year 2020-2021 was presented on 1st February, 2020 by our Finance Minister, Ms. Nirmala Sitharaman and it came effective from 1st April, 2020. According to the effective budget, the salaried employees and HUF eligible to pay tax are given an option to opt between the existing tax regime (See: Income Tax Slabs for the Financial Year 2019-2020) and the new tax regime. However, If the individual opts for the new tax regime, then the taxpayer will have to forego certain existing exemptions. The new tax regime is as follows:
Tax Slab For Individuals for the Financial Year 2020-2021
Please note that the new tax regime is not differentiated on the basis of age group.
Income Tax Slab for Domestic Companies
A domestic company is taxable at 30%. However, the tax rate is 25% if turnover or gross receipt of the company does not exceed Rs. 400 crore in the previous year.
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Income Tax Slabs For Partnership Firm
Partnership firms are subject to a flat tax rate of 30% on their total income, regardless of the income level. It’s important to note that additional surcharge and health and education cess may also apply as per the applicable tax rules.
Income Tax Slabs for Local Authority
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Exemptions granted in the financial year 2020-2021
The income tax deductions still available in the new regime include:
- Death-cum-retirement benefit;
- Commutations of pensions;
- Leave encashment on retirement;
- Amount received on Voluntary Retirement Scheme (VRS) up to Rs 5 lacs;
- Employee Provident Fund money;
- Money received as scholarship for education;
- Cash received as awards constituted in public interest, and
- Short-term withdrawals and maturity amount from the National Pension Scheme
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