As proposed in Budget 2020, New Regime Tax Slabs are completely optional allowing the Individuals/HUFs to continue paying their income tax based on Old regime Tax Rates. Old Regime Tax Slabs were classified in different tax rates made based on age and residential status. To choose his/her tax payment rate, a taxpayer should keep in mind that:

  • If individuals/HUFs earn non-business income, they can choose the option of new/old regime tax slabs every year.
  • In case they earn income from business, one time chance is given to choose their option and they cannot shift their choice later, unless they change their source of income to non-business mode.

Also, Old Regime Tax Slabs will allow the deductions and exemptions over the taxable income chopped off in New Regime Tax Slabs of FY 2020-21. But, taxpayers should know that the New Regime rates are reduced than the old ones.

Old Regime Tax Rates Applicable in AY 2021-22

Income Tax Slabs of FY 2019-20 that a taxpayer can choose for tax payment in AY 2021-22 are:

Income Tax Slabs for Resident Individual (Below 60 years of age)

Taxable Income Slabs Income Tax Rates and Cess
Up to Rs 2.5 lakh Nil
Rs 2,50,001 to Rs 5 lakh 5% of (Total income minus Rs 2.5 lakh) + 4% cess
Rs 5,00,001 to Rs 10 lakh Rs 12,500 + 20% of (Total income minus Rs 5 lakh) + 4% cess
Rs 10,00,001 and above Rs 1,12,500 + 30% of (Total income minus Rs 10 lakh) + 4% cess

Income Tax Slabs for Resident Senior Citizens (60 years-80 years of age)

Taxable Income Slabs Income Tax Rates and Cess
Up to Rs 3 lakh Nil
Rs 3,00,001 to Rs 5 lakh 5% of (Total income minus Rs 3 lakh) + 4% cess
Rs 5,00,001 to Rs 10 lakh Rs 10,000 + 20% of (Total income minus Rs 5 lakh) + 4% cess
Rs 10,00,001 and above Rs 1.10 lakh + 30% of (Total income minus Rs 10 lakh) + 4% cess

Income Tax Slabs for Resident Super Senior Citizens (Above 80 years of age)

Taxable Income Slabs Income Tax Rates and Cess
Up to Rs 5 lakh Nil
Rs 5,00,001 to Rs 10 lakh 20% of (Total income minus Rs 5 lakh) + 4% cess
Rs 10,00,001 and above Rs 1 lakh + 30% of (Total income minus Rs 10 lakh) + 4% cess

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  • Rebate of Rs. 12,500 on taxable income up to Rs. 5 lakh is allowed as u/s 87A
  • Standard Deduction of Rs. 50,000 is permitted for FY 2019-20 onwards.
  • For Non-Resident Individual (NRI), basic exemption limit is Rs. 2.50 lakh irrespective of their age.

Surcharges on Old Regime Income Tax

Additional surcharges are levied for super rich with income as given below:

Taxable Income Taxable Income
Income between Rs. 50 lakh and Rs. 1 crore 10
Income between Rs. 1 crore and Rs. 2 crore 15
Income between Rs. 2 crore and Rs.5 crore 25
Income above Rs. 5 crore 37