Income Tax Calculation Formula In Excel Fy 2019-20

Income Tax Calculator FY 2019-20 (AY 2020-21)

Calculate your income tax liability for Financial Year 2019-20 using the official tax slabs and deductions

Investments in PPF, EPF, LIC, ELSS, etc.
Health insurance premium for self, family and parents
Max ₹2,00,000 for self-occupied property

Comprehensive Guide: Income Tax Calculation Formula in Excel for FY 2019-20 (AY 2020-21)

Calculating income tax for Financial Year 2019-20 (Assessment Year 2020-21) requires understanding the tax slabs, deductions, and exemptions applicable during that period. This guide provides a complete breakdown of the income tax calculation process, including how to implement it in Microsoft Excel.

Income Tax Slabs for FY 2019-20

The income tax slabs for FY 2019-20 were structured based on the age of the taxpayer. Here are the different categories:

1. For Individuals Below 60 Years (General Category)

Income Range (₹) Tax Rate Surcharge Health & Education Cess
Up to 2,50,000 0% N/A N/A
2,50,001 to 5,00,000 5% N/A 4%
5,00,001 to 10,00,000 20% N/A 4%
Above 10,00,000 30% 10% (if income > ₹50 lakh)
15% (if income > ₹1 crore)		 4%

2. For Senior Citizens (60 to 80 Years)

Income Range (₹) Tax Rate
Up to 3,00,000 0%
3,00,001 to 5,00,000 5%
5,00,001 to 10,00,000 20%
Above 10,00,000 30%

3. For Super Senior Citizens (Above 80 Years)

Income Range (₹) Tax Rate
Up to 5,00,000 0%
5,00,001 to 10,00,000 20%
Above 10,00,000 30%

Key Deductions Available in FY 2019-20

Understanding available deductions is crucial for accurate tax calculation. Here are the major deductions:

1. Section 80C Deductions (Max ₹1,50,000)

  • Public Provident Fund (PPF)
  • Employees’ Provident Fund (EPF)
  • Life Insurance Premiums
  • Equity Linked Savings Scheme (ELSS)
  • National Savings Certificate (NSC)
  • Sukanya Samriddhi Yojana (SSY)
  • 5-year Bank Fixed Deposits
  • Tuition Fees for children
  • Principal repayment of home loan

2. Section 80D (Medical Insurance)

  • ₹25,000 for self, spouse and dependent children
  • Additional ₹25,000 for parents (₹50,000 if parents are senior citizens)
  • ₹5,000 for preventive health check-up (within the overall limit)

3. House Rent Allowance (HRA) Exemption

The HRA exemption is calculated as the minimum of:

  1. Actual HRA received
  2. 50% of salary (for metro cities) or 40% (for non-metro)
  3. Actual rent paid minus 10% of salary

4. Home Loan Interest (Section 24)

  • ₹2,00,000 for self-occupied property
  • No limit for let-out property (actual interest paid)

5. Other Important Deductions

  • Section 80E: Interest on education loan (no limit)
  • Section 80G: Donations to approved funds (50% or 100% deduction)
  • Section 80TTA: Interest on savings account (₹10,000)
  • Section 80GG: Rent paid when HRA not received

Step-by-Step Income Tax Calculation Process

Follow these steps to calculate your income tax for FY 2019-20:

  1. Calculate Gross Total Income:

    Sum up all your income sources:

    • Salary income
    • House property income
    • Capital gains
    • Business/profession income
    • Other sources (interest, dividends, etc.)

  2. Calculate Taxable Income:

    Subtract eligible deductions from Gross Total Income:

    • Standard deduction (₹40,000 for salaried individuals)
    • Section 80C, 80D, etc. deductions
    • HRA exemption
    • Home loan interest

  3. Apply Tax Slabs:

    Use the appropriate tax slab based on your age group to calculate tax on the taxable income.

  4. Add Surcharge (if applicable):

    • 10% surcharge if total income > ₹50 lakh
    • 15% surcharge if total income > ₹1 crore

  5. Add Health & Education Cess:

    4% of (Income Tax + Surcharge)

  6. Calculate Net Tax Liability:

    Sum of Income Tax + Surcharge + Cess

  7. Subtract TDS/Advance Tax:

    Deduct any tax already paid through TDS or advance tax payments

Creating an Income Tax Calculator in Excel

You can create a comprehensive income tax calculator in Excel using the following approach:

Excel Formula Structure

Here’s how to structure your Excel sheet:

  1. Input Section:
    • Total Income (Cell B2)
    • Age Group (Dropdown in Cell B3 with options: “<60”, “60-80”, “>80”)
    • Section 80C (Cell B4)
    • Section 80D (Cell B5)
    • HRA Received (Cell B6)
    • Rent Paid (Cell B7)
    • Home Loan Interest (Cell B8)
  2. Calculation Section: 
    =IF(B3="<60", MIN(B2,250000), IF(B3="60-80", MIN(B2,300000), MIN(B2,500000)))
// Basic exemption based on age

=MIN(B6, MIN(IF([@Metro]="Yes",B10*0.5,B10*0.4), B7-B10*0.1))
// HRA exemption calculation (B10 = Salary)

=B2-B4-B5-MIN(B6,MIN(IF([@Metro]="Yes",B10*0.5,B10*0.4),B7-B10*0.1))-MIN(B8,200000)
// Taxable income after deductions

=IF(C2<=250000,0,
   IF(C2<=500000,(C2-250000)*0.05,
   IF(C2<=1000000,500000*0.05+(C2-500000)*0.2,
   500000*0.05+500000*0.2+(C2-1000000)*0.3)))
// Tax calculation for <60 age group

=IF(C2>5000000,D2*0.1,IF(C2>10000000,D2*0.15,0))
// Surcharge calculation

=(D2+D3)*0.04
// Health & Education Cess

=D2+D3+D4
// Total tax liability

Complete Excel Formula Example

Here’s a complete example of how to calculate tax in Excel for someone under 60:

=IF(B2<=250000, 0,
   IF(B2<=500000, (B2-250000)*5%,
   IF(B2<=1000000, 12500+(B2-500000)*20%,
   112500+(B2-1000000)*30%)))
+ IF(B2>5000000, (IF(B2<=10000000, (B2-5000000)*10%, 500000+(B2-10000000)*15%)))
+ (previous_result)*4%

Common Mistakes to Avoid

When calculating income tax for FY 2019-20, watch out for these common errors:

  1. Incorrect Age Group Selection:

    Using wrong tax slabs based on incorrect age group can lead to significant calculation errors.

  2. Double Counting Deductions:

    Some deductions like home loan principal (under 80C) and interest (under 24) are separate.

  3. Ignoring Surcharge Thresholds:

    Forgetting to apply 10% surcharge for income above ₹50 lakh or 15% for above ₹1 crore.

  4. Wrong HRA Calculation:

    Not considering the minimum of three conditions for HRA exemption.

  5. Missing Cess Calculation:

    Health & Education Cess of 4% is often forgotten in manual calculations.

  6. Incorrect Residential Status:

    NRI tax rules differ from resident Indians, especially for income earned outside India.

  7. Not Considering Rebate:

    For FY 2019-20, full rebate was available for income up to ₹5 lakh (after deductions).

Comparison: Old vs New Tax Regime (Introduced in Budget 2020)

While FY 2019-20 used the old tax regime, Budget 2020 introduced a new optional regime from FY 2020-21. Here's a comparison:

Feature Old Regime (FY 2019-20) New Regime (FY 2020-21 onwards)
Tax Slabs 3 slabs (5%, 20%, 30%) 6 slabs (5%, 10%, 15%, 20%, 25%, 30%)
Basic Exemption ₹2.5L (₹3L for seniors, ₹5L for super seniors) ₹2.5L for all
Deductions All deductions (80C, 80D, HRA, etc.) allowed Most deductions not allowed (except 80CCD(2) and 80JJAA)
Standard Deduction ₹40,000 for salaried ₹50,000 for all
Surcharge 10% (₹50L-₹1Cr), 15% (>₹1Cr) Same as old regime
Cess 4% Health & Education Cess Same as old regime
Rebate Full rebate for income ≤ ₹5L Full rebate for income ≤ ₹5L

Frequently Asked Questions

  1. Q: What was the standard deduction for FY 2019-20?

    A: The standard deduction for salaried individuals was ₹40,000 for FY 2019-20.

  2. Q: Could I claim both HRA and home loan benefits?

    A: Yes, you could claim both if you were living in a rented house while also paying interest on a home loan for another property.

  3. Q: What was the maximum deduction under Section 80C?

    A: The maximum deduction under Section 80C was ₹1,50,000 for FY 2019-20.

  4. Q: How was long-term capital gains taxed in FY 2019-20?

    A: Long-term capital gains (LTCG) on equity shares and equity-oriented funds exceeding ₹1 lakh were taxed at 10% without indexation benefit.

  5. Q: Was there any rebate available under Section 87A?

    A: Yes, a full tax rebate was available under Section 87A for resident individuals with total income up to ₹5,00,000.

  6. Q: How was income from house property calculated?

    A: Net annual value (after municipal taxes) minus 30% standard deduction minus home loan interest (up to ₹2,00,000 for self-occupied property).

Official Resources and References

For authoritative information on income tax calculation for FY 2019-20, refer to these official sources:

Disclaimer: This calculator and guide are for informational purposes only. For precise tax calculation, consult a qualified chartered accountant or tax professional. The authors and publishers are not responsible for any errors or omissions, or for any losses that may arise from reliance on this information.

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