What is Income Tax Slab?

What is Income Tax Slab?

In India, when an individual is having annual income more than the exemption limit, the Indian government levies tax at a specific rate. The slab system contains the different tax rates for different income groups. In easy words, If an individual is earning more then he/she has to pay more taxes based on the annual income and income slabs rates. This type of taxation procedure allows an appropriate tax scheme in India. Every year, the government declares a budget, Based on this annual budget report, the slabs system keeps on changing every year. The Indian government has made it easy by classifying taxes into two classes, Direct tax, and Indirect tax. Filing income tax returns is a mandatory requirement for taxpayers individuals according to the laws of the Income Tax Act, 1961 If their annual income is more than the exemption limit. Taxpayers individuals can also take advantage of tax benefits under the different sections. However, we must understand the income tax slabs to reap the benefits. It is important to understand how the income tax slab system works, what are the taxable incomes in India, the eligibility criteria to pay income tax, and the different income tax slabs 2021-22.
Taxable incomes in India
The Indian government identifies taxpayers based on the different tax slabs of the income tax act as per the social and economic differences among the population in the country. Taxpayers are mainly categorized into the down-mentioned categories.

• Individuals
• Hindu Undivided Family (HUF)
• Association of Persons (AOP)
• Body of Individuals (BOI)
• Firms
• Companies
• Trust
• Artificial Judicial Person

The income tax department categorized all the individuals into two categories (resident and the other is a non-resident). Resident individuals have to pay tax as per the income they earn in India abroad, but non-resident individuals have to bear taxes on the income they earn only in India. The residential class should be checked every year for tax objectives. Moreover, The Government classified resident individuals into three categories- Which are given below-

1. Individuals below the age of 60 years.
2. Individuals below the age of 60 to 80 years.
3. Individuals above the age of 80 years.

Income tax act 1961, section 162 classified the eligible income types into different categories to pay the income tax on time. Those income classified categories are income from salary, income from capital gains, income from a profession like business, income from a house party, and income from dividends, assets, or legal gambling.

Tax slab and rates for the Financial Year 2021-22

Several amendments to the Finance Act of 2020 were added and announced. A major implementation was made as a new tax regime, which is considered the most significant step by the Indian government. But many taxpayers are still perplexed about it. A new section 115BAC was added to the budget for 2020 to create a concept of a new tax regime by the tax department. Taxpayers, Individuals, and HUF(Hindu Undivided Family) can choose any of the regimes such as old tax regime, or new tax regimes per their preferences. Both the tax regimes have their tax slabs and exemptions. We have mentioned certain major key points of the new tax slab below- The new tax slab was brought into the effect from A.Y. 2021-22. The money earned by a taxpayer, individual, or person in the fiscal year 2020-21 comes under the new tax regime. The new tax slab has the same surcharge and cess rates as the old tax slabs. The new income tax regime is unrestricted to everyone so that even senior and super senior citizens can use it. In both tax regimes, residents with a total income of less than 5 lakh are eligible for a rebate u/s 87A:

Income tax slab & rates for Individuals below 60 years

Individuals who are below the age of 60 years can choose any of the regimes between old and new tax regime slab of F.Y. 2020-21. tax slab is mentioned for the individuals of 60 years old below.

Income tax slab for between 60 – 80 years

Here are the income tax slabs 2021-22 for senior citizens.

Income tax slab for more than or equal to 80 years

Here are the income tax slabs 2021-22 for super senior citizens.

Income tax slab for Non-Resident Individuals

Here are the income tax slabs 2021-22 for Non-Resident Individuals.

Tax slab for domestic companies for F.Y. 2019-2020