1. What is income tax slab ?
The Indian Income Tax levies taxes on individual taxpayers on the basis of the slab scheme. The Slab system means that different tax rates are set for different income levels. It means that tax rates continue to rise with the increase in taxpayer's income. This type of taxation facilitates sustainable and fair tax systems in the country. Such tax slabs tend to change the budget from time to time. Income tax is divided into three categories of “taxpayers” such as:
- Individuals (aged less than of 60 years) including residents and non-residents
- Resident Senior citizens (60 to 80 years of age)
- Resident Super senior citizens (aged more than 80 years)
2. Income Tax Slab Rates for FY 20-21 (AY 2021-22 )
a. Income tax slab rate for New Tax regime -FY 2020-21 – Why is it optional?
In this new state, taxpayers have OPTION to choose from or:
- Paying income tax at low prices under the new Tax Act on the condition that they pay something allowable exemptions and rebates available under income tax, Or
- Continuing to pay taxes below existing tax rates.The thinker can get discounts as well exemption from living in the old empire and paying taxes at the highest rate already available.
The amount of tax revenue used in the new tax government - FY 2020-21.
|Income Tax Slab||New Regime Income Tax Slab Rates FY 2020-21 |
(Applicable for All Individuals & HUF)
|Rs 0.0 – Rs 2.5 Lakhs||NIL|
|Rs 2.5 lakhs- Rs 3.00 Lakhs||5% (tax rebate u/s 87a is available)|
|Rs. 3.00 lakhs – Rs 5.00 Lakhs|
|Rs. 5.00 lakhs- Rs 7.5 Lakhs||10%|
|Rs 7.5 lakhs – Rs 10.00 Lakhs||15%|
|Rs 10.00 lakhs – Rs. 12.50 Lakhs||20%|
|Rs. 12.5 lakhs- Rs. 15.00 Lakhs||25%|
|Rs. 15 Lakhs||30%|
Please note that the tax rates for the new tax government are the same for all categories People, namely Individuals and HUF aged 60, Citizens over 60 years of age up to 80 years, with high citizens over 80 years of age. There is therefore no extended release the benefit limit will be available to older persons and older persons in the New Tax kingdom.
People with a taxable income of less than or equal to Rs 5 lakh will be eligible for tax u / s discount 87A tax debt will not belong to that person in both - New and old / existing tax regimes.
The basic release limit for NRIs is Rs 2.5 Lakh regardless of age.
An additional 4% Health and Education increase will be added to the income taxdebt in all cases. (increased from 3% from FY 18-19)
The taxable payroll tax is payable below all the categories mentioned above::
10% of Income tax if total income > Rs.50 lakh
15% of Income tax if total income > Rs.1 crore
25% of Income tax if total income > Rs.2 crore
37% of Income tax if total income > Rs.5 crore
b. Income tax slabs rate for Old Tax regime -FY 2020-21
Income tax slabs for Individual aged below 60 years & HUF
|Income Tax Slab||Individuals Below The Age Of 60 Years – Income Tax Slabs|
|Up to Rs 2.5 lakhs||NIL|
|Rs. 2.5 lakh -Rs. 5Lakhs||5%|
|Rs 5 .00 lakh – Rs 10 lakhs||20%|
|> Rs 10.00 lakh||30%|
Income tax exemption limit is up to Rs.2,50,000 for Individuals , HUF below 60 years aged and NRIs for FY 2018-19
An additional 4% Health & education cess will be applicable on the tax amount calculated as above.
10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.
15% of income tax, where the total income exceeds Rs.1 crore.
c. Difference of slab rates between New tax regime & Old Tax regime
|Income Tax Slab||Existing Regime Slab Rates for FY 19-20 and FY 20-21||New Regime Slab Rates for FY 20-21|
|Resident Individuals & HUF < 60 years of age & NRIs||Resident Individuals & HUF > 60 to < 80 years||Resident Individuals & HUF > 80 years||Applicable for All Individuals & HUF|
|Rs 0.0 – Rs 2.5 Lakhs||NIL||NIL||NIL||NIL|
|Rs 2.5 – Rs 3.00 Lakhs||5% (tax rebate u/s 87a is available)||NIL||NIL||5% (tax rebate u/s 87a is available)|
|Rs. 3.00- Rs 5.00 Lakhs||5% (tax rebate u/s 87a is available)||NIL|
|Rs. 5.00 – Rs 7.5 Lakhs||20%||20%||20%||10%|
|Rs 7.5 – Rs 10.00 Lakhs||20%||20%||20%||15%|
|Rs 10.00 – Rs. 12.50 Lakhs||30%||30%||30%||20%|
|Rs. 12.5 – Rs. 15.00 Lakhs||30%||30%||30%||25%|
|Rs. 15 Lakhs||30%||30%||30%||30%|
d. Conditions for opting New Tax regime.
A taxpayer who chooses tariffs for the new tax government will have to sacrifice something exemptions and reductions available from the existing existing tax government. In total there are 70 draws and unauthorized release, from which the most commonly used source is listed below:
Regular Exemption and Withdrawal List is "not allowed" under the new tax rate state
Leave Travel Allowance (LTA)
House Rent Allowance (HRA)
Daily expenses in the course of employment
Children education allowance
Other special allowances [Section 10(14)]
Interest on housing loan (Section 24)
Pulling under Chapter VI-A Capture (80C, 80D, 80E etc.) (Excluding category 80CCD (2))
List of deductions are “allowed” under the new tax rate regime
Transport allowance for specially abled people
Conveyance allowance for expenditure incurred for travelling to work
Investment in Notified Pension Scheme under section 80CCD(2)
Deduction for employment of new employees under section 80JJAA
Depreciation u/s 32 of the Income-tax act except additional depreciation.
Any allowance for travelling for employment or on transfer
e. Example for Old Tax regime Vs New Tax regime & which is better?
That being said, if you already have a financial plan to build wealth by investing in tax-saving tools; mediclaim and life insurance; paying tuition fees for children; EMI repayment by education loans; buying a house with a home loan; always, the old government will help you with higher tax cuts and lower tax exemptions.
In view of the above and considering the new tax regime, if taxpayers want to choose the tax rates for the permit, they can check both types of state. Therefore, it is advisable to conduct comparative tests and analyzes under both states and to choose the one that is most beneficial as it may vary from person to person.
Let us take the example of comparing the Old & New Tax regime of an assessee for Rs 10 Lakh.
Mr Rahul has a salary of Rs 10 lakh. His total investment of s 80C is Rs 1.7 lakh under ELSS, PF, LIC premium and the main mortgage installment. He also pays Rs 28000 for medical insurance for him and his wife. He has paid interest on a home loan of Rs 75000 in FY 20-21. Let's see the tax evasion in both states
|Particulars||Old Tax Regime (Rs)||New Tax Regime (Rs)|
|Tax Slab (OLD)|
|0 to 2.5 Lakh||–||–|
|2.5 to 5 Lakh @ 5%||12,500||–|
|5 Lakh to 10 Lakh @ 20%||50,000||–|
|> 10 Lakh @ 30%||–||–|
Tax Slab (NEW)
|0 to 5 Lakh||–||–|
|2.5 to 5 Lakh @ 5%||–||12,500|
|5 to 7.5 Lakh @ 10%||–||25,000|
|7.5 Lakh to 10 Lakh @ 15%||–||37,500|
|10 Lakh to 12.5 Lakh @ 20%||–||–|
|12.5 Lakh to 15 Lakh @ 25%||–||–|
|> 15 Lakh @ 30%||–||–|
|Cess @ 4%||2,500||3,000|
Total Tax Outgo
As illustrated above, if revenue exceeds Rs 10 lakh or deducted / S 80C, 80D, and 24 (b) of the Income Tax Act is available, the old state benefits greatly from the tax planning perspective. While people in the low-income group, earning an income of Rs 5 lakh; The new state of tax evasion may seem practical.
f. Time of Selection of option of ols vs new regime?
|Nature of Income||Time of Selection of option of old vs new regime|
Income from Salary or any other head of income attracting TDS
An employee can choose to choose a new tax regime and be closer to his or her employer FY 2020-21. Employees can change the selection option state taxation every year
However if new tax slab regime is opted at the begning of the year, it cannot be changed anytime during the year for TDS purpose, however the option can be changed at the time of filing of Income-tax return.
Income from Business & Profession
|In the event of Business or Activity revenue, an optional option between tax laws is found only once for a particular business.|
g. New Tax regime Slab rates for domestic companies – FY 2020-21.
|Particulars||Existing / Old regime Tax rates||New Regime Tax rates|
Company opens section 115BAB (excluding section 115BA and 115BAA) & registered on or after October 1, 2019 and has begun production on or before March 31, 2023.
Company opts for Section 115BAA , wherein the total income of a company has been calculated without claiming specified deductions, incentives, exemptions and additional depreciation
The company opens the 115BA section registered on or after 1 March 2016 in the manufacture of any object or object and does not require reduction as defined in the paragraph section.
The company's gross income or receipt is less than Rs. 400 crore on last year 2018-19
Any other domestic company
* Please refer to the new categories to check the performance of the above income tax rates.
Additional exceptions in Health and Education at the rate of 4% will be included in the income tax liability in all cases.
- Taxes applicable to companies are as follows:
- 7% income tax when total income> Rs 1 crore
- 12% income tax when total income> Rs.10 crore
- 10% of income tax when the domestic company opted for sections 115BAA and 115BAB
h. Income tax rate for Partnership firm or LLP as per old/ new regime.
Frequently Asked Questions
Q- Do I have to mandatorily opt for New tax regime while filing returns for AY 20-21?
No, the new Income Tax regime can be selected and introduced by the finance department to facilitate tax compliance. The taxpayer has the option of choosing a new Tax state or continuing with the old tax regime. If you are an employee, the option should be selected at the beginning of the year and can be changed next year. However, in the case of business or professionalism, the option is available only once in AY 20-21. We will advise you to check your tax exits looking at both states and choose the one that will help you the most.
Q- Can I claim 80C deductions and opt for a new income tax slab regime ?
No, the new tax regime does not allow for many reductions and exemptions allowed for the old / existing tax level. The deduction of s 80C cannot be demanded from the taxpayer selects the tax clearance rates according to the new state.
Q- How should I calculate Income Tax for F.Y 2020-21
FY 20-21 allows a taxpayer to pay tax by choosing any of the two tax states, the Old Tax Empire or the New Tax. The new tax regime gives a person the freedom to continue with the old tax regime if he wants to. When choosing a new tax regime, the taxpayer will be required to waive certain reductions and exemptions granted to the old tax regime that will be obtained if the old tax regime is elected to continue. one under Section 80CCD (2). This means that the employer's contribution to the National Pension Scheme is deducted from the annual salary. Under the old and new states, you can deduct Rs 2,50,000 from your gross salary to your income tax as the basic exemption applies to both states.
Q- How does the government collect the taxes?
Taxes are collected by the Government through three methods: a) voluntary payment by taxpayers to various designated banks. For example, Advance Tax and Self-Assessment Taxes paid by taxpayers, b) Source Taxes [TDS] on the recipient's salary, and c) Taxes collected from the source [TCS].
Q- What is the time period considered for the purpose of levy of income tax?
Income tax is levied on an individual's annual income. The year under the Income Tax Act is a period that commences on 1 April and ends on 31 March of the next calendar year. The Income Tax Act divides the year as- (i) The previous year, and (ii) the Year of the Inspection.
Q- On the Challan, what does income tax on companies and income tax other than companies mean?
The tax payable by companies on their income is called corporate tax, and the same payment on challan is called Income-tax on Companies (Corporation tax) -0020. Non-corporate tax is called Income-tax, and if the same is paid to the challan it will be called Income-tax (excluding Company) -0021
Q- Is the due date for filing an Income tax Return same for all the taxpayers?
No, the due date for all the taxpayers is not the same. For individual taxpayers the due date is 31st July of the assessment year. However due to Covid, the due date for filing ITR for FY 19-20 has been extended to 31st Dec for individual / HUF , non -audit cases whereas it is 31st Jan for audit cases.
Q- What is the meaning of rebate under section 87 A under the IT Act?
Section 87A is a statutory grant that allows for a tax rebate under the Income Tax Act of 1961. The clause introduced by the Finance Act of 2013 provides for tax exemptions for persons earning below a certain limit. Section 87 A provides that anyone living in India and whose income does not exceed Rs 5,00,000 is entitled to claim a rebate. The full tax rebate is therefore available to people with less than Rs 5 Lac of taxable income. This discount only applies to individuals and not to companies, etc. And we are calculating before adding the health and education expenditure of 4%.
Q- Who decides the IT slab rates and can they change?
Yes, IT slab prices can be changed by government. If there are changes in IT slab levels in the financial year then they are presented in that year's Budget and presented to Parliament.
Q- Are there separate slab rates for different categories?
Yes. There are separate slab rates for individual taxpayers aged below 60 years, between 60 to 80 years (senior citizens) and above 80 years (super senior citizens). Also tax rate for partnership firms and LLPs, Companies, Local authorities and Co-operative societies etc are different.
Q- Do I need to file Income Tax Return (ITR) if my annual income is below ₹ 2.5 lakh of basic exemption limit?
The taxation process is dependent on a number of factors. It is advisable to get in touch with a personal tax advisor.
Q- How to file an income tax return online?
To submit your income tax return online, log on to either the income tax e-filing portal or you can also e-file through Myitronline . For e-filing through the income tax portal, log on to https://www.incometaxindiaefiling.gov.in/home and download the excel/Java utilities from the “download > ITR return preparation software” tab on the main screen. You can extract the ZIP files and fill the required information in these utilities and upload it after logging in with PAN, password and the captcha. Please remember to verify the return before submitting or within 120 of filing ITR. ITR filing is incomplete without verification. You can also directly fill the details in the auto-populated ITR form through “prepare and submit online”. Please click here to read the step-by-step guide on how to e-file ITR on the income tax e-filing portal. Also, you can simplify your e-filing and do it in under 7 minutes with Myitronline . To submit your income tax return online, log on to either the income tax e-filing portal or you can also e-file through Myitronline . For e-filing through the income tax portal, log on to https://www.incometaxindiaefiling.gov.in/home and download the excel/Java utilities from the “download > ITR return preparation software” tab on the main screen. You can extract the ZIP files and fill the required information in these utilities and upload it after logging in with PAN, password and the captcha. Please remember to verify the return before submitting or within 120 of filing ITR. ITR filing is incomplete without verification. You can also directly fill the details in the auto-populated ITR form through “prepare and submit online”. Please click here to read the step-by-step guide on how to e-file ITR on the income tax e-filing portal. Also, you can simplify your e-filing and do it in under 7 minutes with Myitronline .click here toknow how how.
Q- How much income is tax free in india?
The income tax law has set a basic limit for people to the extent that taxpayers are not required to pay taxes. Such a limit varies according to the different categories of taxpayers. A person under the age of 60 is not required to pay tax up to the income limit of Rs 2.5 Lakh. People over the age of 60 but under the age of 80 are not required to pay a tax of up to Rs 3 lakh of income. People over the age of 80 are not required to pay a tax of up to Rs 5 lakh of income.
Q- How to calculate surcharge on income tax?
Surcharge is a tax on tax. Hence surcharge is calculated on the tax payable and not on the income earned. For example, if you have an income of Rs 1000 with 30% tax of Rs. 300, if the income is subject to surcharge then 10% surcharge would be levied on tax of Rs. 300 i.e Rs 30. Surcharge is levied at different rates i.e 10% is levied is total income is > 50 lakh, 15% is levied if total income is more than 1 crore, 25% of income if total income is > 2 crore and 37% if total income is more than 5 crore.
Q- How to calculate the age of a senior citizen for income tax?
A person over the age of 60 is considered a senior citizen and a person over the age of 80 is considered a senior citizen for income tax purposes. Older people and senior citizens have been granted exempt tax restrictions and certain benefits by the Income Tax Act to provide assistance.
Q- How to pay income tax online?
To make an income tax payment online, please log in to nsdl.com. Please select the appropriate challan for example ‘challenge and / ITNS 280’ to pay in the event of a self-assessment tax and choose to proceed. A window will open, select a tax as tax (excluding companies), select a payment type, select a payment method, and enter details such as PAN, AY, address, etc. Once you have processed, a window will open that requires you to make a payment using a bank net or bank card. Once the payment has been completed, the opposing filing will be shown as proof of payment. Please save this counterfoil for future use.