Income Tax Rates as per Revised Slabs
In India, the income is taxed as per the slabs mentioned by the finance ministry. Tax rates have been prescribed for different slabs and the rate increases as the income increases.
The tax rates as per the existing slabs are as follows:
Income Tax Slabs & Rates for Individual Tax Payers (Less Than 60 Years Old)
| Income Tax Slab | Tax Rate for Individual & HUF Below the Age Of 60 Years |
| Upto Rs. 2,50,000 | NiL |
| Rs. 2,50,001 to Rs. 5,00,000 | 5% of total income exceeding Rs. 2,50,000 |
| Rs. 5,00,001 to Rs. 10,00,000 | Rs. 12,500 + 20% of income exceeding Rs. 5,00,000 |
| Above Rs. 10,00,000 | Rs.1, 12,500 + 30% of income exceeding Rs. 10,00,000 |
Note:
- An additional 4% Health & education cess will be applicable on the tax amount calculated as above.
- A tax rebate under section 87A is allowed to individual taxpayers a maximum amount of Rs 12,500 for total income up to Rs. 5,00,000.
Income Tax Slabs for Senior Citizens (60 Years Old Or More but Less than 80 Years Old)
| Income Tax Slab | Tax Rate for Individual above the age of 60 Years or more but less than 80 years |
| Upto Rs. 3,00,000 | NiL |
| Rs. 3,00,001 to Rs. 5,00,000 | 5% of total income exceeding Rs. 3,00,000 |
| Rs. 5,00,001 to Rs. 10,00,000 | Rs. 10,000 + 20% of income exceeding Rs. 5,00,000 |
| Above Rs. 10,00,000 | Rs.1, 10,000 + 30% of income exceeding Rs. 10,00,000 |
Note:
- An additional 4% Health & education cess will be applicable on the tax amount calculated as above.
- A tax rebate under section 87A is allowed to individual taxpayers a maximum amount of Rs 12,500 for total income up to Rs. 5,00,000.
Income Tax Slabs for Super Senior Citizens (80 years old or more)
| Income Tax Slab | Tax Rate for Individual Above the Age Of 80 Years |
| Upto Rs. 5,00,000 | NiL |
| Rs. 5,00,001 to Rs. 10,00,000 | 20% of income exceeding Rs. 5,00,000 |
| Above Rs. 10,00,000 | Rs.1, 00,000 + 20% of income exceeding Rs. 10,00,000 |
Note :
An additional 4% Health & education cess will be applicable on the tax amount calculated as above.
In the Finance Bill, 2020, the Finance ministry has proposed Income tax slabs under the new tax regime for all individuals for FY 2020-21 (AY 2021-22). The revised slabs are as stated below:
| Income Tax Slab | Tax Rate |
| Upto Rs. 2.5 lakh | NiL |
| Rs. 2.5 lakh to Rs. 5 lakh | 5% (Tax rebate of Rs 12,500 available under section 87A) |
| Rs. 5 lakh to Rs. 7.5 lakh | 10% |
| Rs. 7.5 lakh to Rs. 10 lakh | 15% |
| Rs. 10 lakh to Rs. 12.5 lakh | 20% |
| Rs. 12.5 lakh to Rs. 15 lakh | 25% |
| Rs. 15 lakh & above | 30% |
- The tax calculated on the basis of such rates will be subject to health and education cess of 4%.
- Any individual opting to be taxed under the new tax regime from FY 2020-21 onwards will have to give up certain exemptions and deductions.
Here is the list of exemptions and deductions that a taxpayer will have to give up while choosing the new tax regime.
- Leave Travel Allowance (LTA)
- House Rent Allowance (HRA)
- Conveyance
- Daily expenses in the course of employment
- Relocation allowance
- Helper allowance
- Children education allowance
- Other special allowances [Section 10(14)]
- Standard deduction
- Professional tax
- Interest on housing loan (Section 24)
- Chapter VI-A deduction (80C,80D, 80E and so on) (Except Section 80CCD(2) and 80JJA)
Points to remember while opting for the new tax regime:
- Option to be exercised on or before the due date of filing return of income for AY 2021-22
- In case a taxpayer has a business income and exercised the option, he/she can withdraw from the option only once. A business taxpayer withdrawing from the optional tax regime has to follow the regular income tax slabs.
Based on the old and the new tax regime, the individual must select a more optimal option and file the income tax return accordingly.