No Income Tax for Total Income up to Rs. 5 lakh – FY 2019-20 / AY 2020-21. Is it really true ?

Nowadays people are discussing about a news that no income tax is required upto Rs. 5 lakh. Even some people think that they do not need to file income tax return if their Total Income is below 5 lakh. But the fact is this kind of statements are not really true. Most of the people think that tax free income slab is extended upto Rs. 5 lakh. But the fact is, no changes are made in income tax slabs.

No Income Tax payable upto Total Income Rs. 5 lakh. Is this a fake news?

Actually this news is partially correct. No tax is payable upto Rs. 5 lakh, but conditions apply. 

Is I.T. Return filing not mandatory if Total Income below 5 lakh ?

First of all there are no changes made in Income Tax Slabs and rates for FY 2019-20 / AY 2020-21

  • Income Tax exemption limit remains Rs. 2.5 lakh for all Citizens below 60 years.
  • Income Tax exemption limit remains Rs. 3 lakh for Senior Citizens (60 years or above).
  • Income Tax exemption limit remains Rs. 5 lakh for Very Senior Citizens (80 years or above).

It means, Income Tax Return filing is mandatory if your Total Income is above 2.5 lakh (3 lakh for senior citizens and 5 lakh for very senior citizen).

When no tax is payable if Total Income upto Rs. 5 lakh ?

The Conditions are,

  • The Taxpayer should be a Resident Individual.
  • Total Income should be less than 5lakh after considering the Deductions under Chapter VIA.

If both conditions are satisfied, then the taxpayer will get Tax Rebate up to Rs. 12,500/- u/s 87A (earlier Rs. 2500 up to total income Rs. 3.5 lakh.)

Explanation:
Suppose a taxpayer’s Total Income =  500,000
Exemption                                       =  250,000
Total Income after exemption         =  250,000

Tax @ 5% on Total Income            =     12,500
Rebate u/s 87A                               =      12,500
Tax Payable                                    =          0                                                                       

It means, if taxpayer’s total income is 5 lakh or below 5 lakh, then he will get tax rebate u/s 87A. So, no tax is payable. But obviously he need to file income tax return if his Total Income is above 2.5 lakh (3 lakh for senior citizens and 5 lakh for very senior citizen).

A taxpayer’s total income is below 5 lakh, but he filed return after due date. Does he need to pay penalty ?

If a taxpayer missed the due date of filing ITR. Then he needs to pay late fees u/s 234F.

If a taxpayers total income exceeds Rs. 5 lakh, can he get tax rebate u/s 87A.

If taxpayer’s total income exceeds 5 lakh, he does not get tax rebate u/s 87A. He need to pay tax according to slab rates.

INCOME TAX SLAB RATES
For Financial Year: 2019-20 , Assessment Year: 2020-21

Normal Rates for Resident Individuals & HUFs

Taxable Income

Tax rate

Tax + Edu. cess @ 4%

Total

0 – to 250,000/-

Nil

Nil

Nil

250,000/- to 500,000/-

5%

12,500/- + 500/-

13,000/-

500,000/- to 10,00,000/-

20%

(12,500+100,000)/- +4,500/-

117,000/-

10,00,000 /- to above

30%

112,500/- + 30% of taxable income
exceeds 10,00,000/-

Calculate with value

For Senior Citizens (Above 60 years)

Taxable Income

Tax rate

Tax + Edu. [email protected] 4%

Total

0 – to 300,000/-

Nil

Nil

Nil

300,000/- to 500,000/-

5%

10,000/- + 400/-

10,400/-

500,000/- to 10,00,000/-

20%

(10,400 + 100,000)/- + 4,416/-

114,816/-

10,00,000 /- to above

30%

110,400/- + 30% of taxable income exceeds 10,00,000/-

Calculate with value


For Very Senior Citizens (Above 80 years)

Taxable Income

Tax rate

Tax + Edu. [email protected] 4%

Total

0 to 500,000/-

Nil

Nil

Nil

500,000/- to 10,00,000/-

20%

100,000/- + 4,000/-

104,000/-

10,00,000 /- to above

30%

100,000/- + 30% of taxable income  exceeds 10,00,000/-

Calculate with value



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