Every year, the finance minister announces income tax slabs in India. These slab rates differ for different types of taxpayers. Click here to know Income Tax Slab Rates in India. Income Tax Slab 2020 21. Income Tax Slab for FY 2020 21.
Individual taxpayers need to pay income tax based on the slab system they fall under.
A slab system means that various tax rates are recommended for different income ranges. The tax rates continue to rise as the taxpayer’s income rises.
This type of taxation allows the country to have progressive and equitable tax systems. These income tax slabs are subject to change with each budget. Slab rates differ for different types of taxpayers. Income tax has categorized three types of “individual” taxpayers, including
- Younger individuals (under the age of 60), both residents and non-residents
- Senior citizens who live on-site (60 to 80 years of age)
- Residents who are super senior citizens (aged more than 80 years).
New Income Tax Slab Rates For The Individual (FY- 2021-22)
The new regime has an option for taxpayers
- To pay income tax at decreased rates under the New Tax regime, provided they abstain from the allowable exclusions and deductions or
- To continue paying taxes at the current tax rates. The assessee can obtain rebates and exemptions by choosing the previous regime and paying tax at the current higher rate.
|Income Tax Slab||New income tax slab 2021 22|
|Rs 0.0 – Rs 2.5 lakh||No tax|
|Rs 2.5 lakh – Rs 3.00 lakh||5% along with a tax rebate of u/s 87a|
|Rs 3.00 lakh – Rs 5.00 lakh||5% along with a tax rebate of u/s 87a|
|Rs 5.00 lakh- Rs 7.5 lakh||10%|
|Rs 7.5 lakh – Rs 10.00 lakh||15%|
|Rs 10.00 lakhs – Rs 12.50 lakh||20%|
|Rs 12.5 lakhs – Rs 15.00 lakh||25%|
|> Rs 15 lakh||30%|
Points To Be Noted Before Opting For The new Income Tax Slab 2021 22
- Please keep in mind that the tax rates in the new tax regime will remain the same for all classes of individuals, i.e. individuals and HUF up to the age of 60, senior citizens <60, up to the age of 80, and super senior citizens < 80. As a result, there will be no rise in primary exemption limit benefits available to old and super senior citizens under the new income tax slab
- Individuals with a net taxable earning of less than or equal to Rs 5 lakh will be eligible for a tax discount under Section 87A, which means their tax liability will be zero in both the new and old/existing tax regimes. The basic deductible limit for NRIs is Rs 2.5 Lakh, regardless of age
- An additional 4% Health and Education cess will be added to the income tax liability in all cases. (up from 3% in the fiscal year 2018-19) In all of the categories, as mentioned earlier, there will be a surcharge based on the tax rates are as follows
- According to income tax slab 2021 22 If a taxpayer’s total income exceeds ₹.50 lakh, he/she will be subject to a 10% income tax
- If a taxpayer’s total income exceeds ₹.1 crore, he/she will be taxed at a rate of 15%. If your total income exceeds ₹.2 crore, he/she will be taxed at a rate of 25%
- If a taxpayer’s total income exceeds ₹.5 crore, he/she will be taxed at a rate of 37%
Income Tax Slab Rates As Per Old Regime FY (2022-23)
|Income Tax Slab||New Regime Income Tax Slabs|
|Rs 0.0 – Rs 2.5 lakh||No tax|
|Rs 2.5 lakh – Rs 5.00 lakh||5%|
|Rs 5.00 lakh- Rs 7.5 lakh||20%|
|Rs 7.5 lakh – Rs 10.00 lakh||20%|
|Rs 10.00 lakhs – Rs 12.50 lakh||30%|
|Rs 12.5 lakhs – Rs 15.00 lakh||30%|
|> Rs 15 lakh||30%|
Points To Keep In Mind While Opting For Old Regime
- If your net revenue is more than ₹.50 lakh but less than ₹.1 crore, you must pay a 10% surcharge in addition to the 4% cess. A 15% surcharge is applied if the net amount exceeds ₹.1 crore. In comparison to last year’s budget, the cess has risen from 3% to 4%.
Are Tax Slabs In India Subject To Change? If Yes, Who Changes The Tax Slabs?
Every year, the finance minister announces income tax slabs in India. There are currently two different Income Tax regimes. Tax breaks are no longer accessible under the new income tax slab. Tax breaks were available to taxpayers only under the previous regime.
Nirmala Sitharaman, the finance minister, declared the Union Budget for 2022 on February 1, 2022. The current income tax slabs and rates are not being changed in the latest budget.
Is it Legal to Switch Back and Forth between the Old and New Income Tax Slab?
If you are an employed individual, you have the option to make this decision every year. Individuals with income from ‘Salary, ‘House Property,’ ‘Capital Gains,’ and ‘Other Sources’ can choose between the old and new tax regimes each year. Individuals with business or professional income, on the other hand, have only one opportunity to return to the old tax regime after opting for the new one. They can only choose the latest tax regime once in their lives.
Now after knowing all the tax rates of the new as well as old regimes, if you are still confused about which one to choose. Then according to what we have found, most taxpayers benefit from being in the old regime and not the new income tax slab. When they maximize section 80C and take advantage of tax deductions and benefits available in their pay scale, such as claiming HRA, receiving a portion of CTC as reimbursements, and so on.