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Income Tax Slab 2021-22

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Income Tax Slab 2021-22
February 19, 2024

Table of Content

 

Difference of slab rates between the new tax regime and the 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

₹0.0 – ₹2.5 lakh

 

NIL

 

NIL

 

NIL

 

NIL

₹2.5 – ₹3.00 lakh

 

 

5% (Tax rebate u/s 87a is available)

NIL

NIL

 

5% (Tax rebate u/s 87a is available)

₹3.00 – ₹5.00 lakh

5% (Tax rebate u/s 87a is available)

NIL

₹5.00 – ₹7.5 lakh

20%

20%

20%

10%

₹7.5 – ₹10.00 lakh

20%

20%

20%

15%

₹10.00 – ₹12.50 lakh

30%

30%

30%

20%

₹12.5 – ₹15.00 lakh

30%

30%

30%

25%

> ₹15 Lakh

30%

30%

30%

30%

Income tax slab rates for FY 2020-21

1. Income tax slab rate for New Tax Regime FY 2020-21

The new tax regime is an effort to simplify the tax structure in the country by doing away with a slew of exemptions and maintaining a singular tax structure for people across age groups. Tax payers, however, still have the option of choosing their tax regimes -- new or old -- at the beginning of the financial year.

 

Income Tax Slab

Income Tax Slab Rates for FY 2020-21

(New Regime Applicable for HUF and all Individuals)

₹0.0 – ₹2.5 lakh

NIL

₹2.5 lakh – ₹3.00 lakh

 

5% (tax rebate u/s 87a is available)

₹3.00 lakh – ₹5.00 lakh

₹5.00 lakh – ₹7.5 lakh

10%

₹7.5 lakh – ₹10.00 lakh

15%

₹10.00 lakh – ₹12.50 lakh

20%

₹12.5 lakh – ₹15.00 lakh

25%

> ₹15.00 lakh

30%

NOTES:

  • The tax rates in the new tax regime remain the same across all categories, i.e the Hindu Undivided Family and individuals up to 60 years of age, senior citizens above 60 years to 80 years of age, and super senior citizens above 80 years. Therefore, no increase of the basic exemption limit will benefit the senior and the super senior citizens in the new tax regime.
  • Individuals with a net taxable income of up to ₹5 lakh will be eligible for tax rebate u/s 87A which means their tax liability will be nil in both the new and old tax regimes.
  • The basic exemption limit for the NRIs is ₹2.5 lakh irrespective of their age.
  • Additional health and education cess are applicable at the rate of 4% and will be added to income tax liability in all cases. (This has increased from three per cent since FY 18-19)
  • Surcharge applicable as per tax rates are listed below across all categories mentioned above:

○  10% of Income Tax for income > ₹50 lakh

○  15% of Income Tax for income > ₹1 crore

○  25% of Income Tax for income > ₹2 crore

○  37% of Income Tax for income > ₹5 crore

2. Income tax slab rate for Old Tax Regime FY 2021

The old tax regime differentiates between three age cohorts of tax-paying individuals.

Income tax slabs for Individual whose age is below 60 years and HUF

Income Tax Slab

Individuals Below Age Of 60 Years

Up to₹2.5 lakh

NIL

₹2.5 lakh – ₹5 lakh

5%

₹5 lakh – ₹10 lakh

20%

₹10 lakh

30%

NOTES:

○  The exemption limit of income tax is up to ₹2.5 lakh for all Individuals, HUF below 60 years and NRIs for FY 2018-19.

○  An additional 4% health and education cess is applicable on the tax amount.

○  A surcharge of 10% of income tax is applicable where total income exceeds ₹50 lakh to ₹1 crore and 15% of income tax, where total income exceeds ₹1 crore.

Income tax slab for Individual aged from 60 years to 80 years

Income Tax Slab

Senior Citizens (Aged 60 Years - 80 Years)

₹0-.00 – ₹3.00 lakh

NIL

₹3.00 lakh – ₹5.00 lakh

5%

₹5.00 lakh – ₹10 lakh

20%

> Rs 10 lakh

30%

NOTES:

○  The exemption limit on income tax is up to ₹3 lakh for senior citizens for FY 2020-21.

○  An additional 4% health and education cess is applicable on the tax amount.

○  A surcharge of 10% of income tax is applicable where total income exceeds ₹50 lakh to ₹1 cr and 15% of income tax, where total income exceeds ₹1 crore[K1] .

Income tax slab for Individual who are more than 80 years

Income Tax Slab

Super Senior Citizens (Aged 80 Years And Above)

₹0.00 – ₹5.00 lakh*

No tax

₹5.00 lakh – ₹10 lakh

20%

> ₹10 lakh

30%

NOTES:

○  The income tax exemption is up to ₹5 lakh  for super senior citizens for FY 2018-19.

○  A 4%  health and education additional cess is applicable on the taxable amount.

A 10% surcharge is applicable on income tax, where total income exceeds ₹50 lakh to ₹1 crore and 15% of income tax, where total income exceeds ₹1 crore.

Budget highlights: 2020 income tax slab

In Budget 2020, a new set of income tax rates has been announced for those earning up to ₹15 lakh a year. The highlights are listed below:

  • Income between ₹5 and ₹7.5 lakh, reduced to 10% tax from 20%
  • Income between ₹7.5 lakh to ₹10 lakh, reduced to 15% from the current 20%
  • Income between ₹10 lakh to ₹12.5 lakh, reduced to 20% from the current 30%
  • Income between ₹12.5 lakh to ₹15 lakhs, reduced to 25% from the current 30%
  • Income above ₹15 lakh, will continue to pay 30%, but without exemptions.

Over 70 deductions have been removed.

Income tax slab for women

Earlier women used to pay slightly less tax compared to men. However, since FY 2012-13, tax slabs for men and women were made the same and hence there are no income tax exemptions specifically for women.

Income tax slab for women below age 60 years

Taxable income range

Income Tax rate

Up to  ₹2,50,000

Nil

₹2,50,001 – ₹5,00,000

5%

₹5,00,001 – ₹10,00,000

₹12,500 + 20%

Above  ₹10,00,000

₹1,12,500 + 30%

Income tax slab for women between 60 and 80 years of age

Taxable income range

Income Tax rate

Up to  ₹3,00,000

Nil

₹3,00,001 – ₹5,00,000

5%

₹5,00,001 – ₹10,00,000

₹10,000 + 20%

Above  ₹10,00,000

₹1,10,00 + 30%

Income tax slab for super senior citizens, women above 80 years of age.

Taxable income range

Income Tax rate

Up to ₹5,00,000

Nil

₹5,00,001 – ₹10,00,000

20%

Above ₹10,00,000

₹1,10,000 + 30%

Note:

-  All individuals are liable to pay an additional 4% health and education cess on their total taxable amount.

-  Individuals having a net taxable income of up to ₹5 lakh can avail of a standard deduction of Rs 12,500, as per section 87 A.

Cess on income tax

A cess is a form of tax that is levied by the government to raise funds for government schemes. It is only applicable for a specific purpose and discontinued after the objective is fulfilled. The funds collected go into the Consolidated Fund of India (CFI) and are considered an easy way to raise tax revenue by the government. The cesses can be introduced, altered, and removed at any given time.

There are mainly five types of cesses in India

  • The education cess is collected on the tax that an individual has to pay and not on the income that is considered taxable. It is announced in the budget for that particular year.
  • Swachh Bharat Cess was introduced to fund India's cleanliness drive.
  • Krishi Kalyan Cess is imposed and amassed with an aim to develop the agricultural economy.
  • Infrastructure Cess is imposed by the Government of India on the production of vehicles.

Is filing income tax returns compulsory?

As per income tax laws, filing income tax returns is mandatory for individuals whose total income during the financial year exceeds the exemption limit of more than the gross total income of ₹2,50,000. You will be attracting penalties by not filing returns. Also, it will hamper your chances of getting a loan, when you apply for a visa for travel purposes, or even property registration. Do note that the exemption limit for an individual depends on his/her age. Citizens will have to inform the government mandatorily about income earned irrespective of the tax regime in Financial Year 2020-21.

Frequently Asked Questions (FAQ)

✅ Are there separate slab rates for different categories?

Individual taxpayers have to pay tax based on their age and income. For the financial year 2020-21, income tax slab rates are divided into the old regime that has higher tax rates with three tax slabs and the new regime with lower tax rates and six tax slabs.

✅ Do I need to file Income Tax Return (ITR) if my annual income is below ₹2.5 lakh of the basic exemption limit?

If your income is below ₹2.5 lakh, you do not have to file Income Tax Returns (ITR). However, under some circumstances such as personal foreign travel expenses higher than ₹2.5 lakh or payment of electricity bills worth more ₹1 lakh during the financial year, filing ITR is mandatory even if you earn less than ₹2.5 lakh. Furthermore, filing your ITS is beneficial in the long run. It is needed for your loan application and visa process.

✅ Is there any standard deduction for FY 2020-21?

A standard deduction is a flat deduction of ₹50,000 to individuals earning a salary or pension income under the head "Salaries", irrespective of expenses or investments by the individuals. From FY 2020-2021, this deduction can be claimed if you opt for the old tax regime.

✅ What is the 80C limit for 2020 21?

Section 80C is a popular section among taxpayers as it allows to reduce taxable income up to a maximum deduction of ₹1.5 lakh by making tax-saving investments like life insurance premium or incurring eligible expenses like school tuition fees which are available only for Individuals and HUFs.

✅ What are the Income tax slab rates for FY 2021-22?

The income tax slabs and rates remained unchanged in the Union Budget 2021 and taxpayers will continue to follow the same rates applicable in financial year 2020-21. The Budget announcement highlighted that individuals have the option to either opt for the old income tax regime or the new tax regime.

First, let's look at the tax structure as per old regime Check the Source's Here.

Individuals

(Other than senior and super senior citizen)

Net Income Range

Rate of Income-tax

Assessment Year 2021-22

  Assessment Year 2020-21

Up to Rs. 2,50,000

-

-

Rs. 2,50,000 to Rs. 5,00,000

5%

5%

Rs. 5,00,000 to Rs. 10,00,000

20%

20%

Above Rs. 10,00,000

30%

30%

Senior Citizen

(who is 60 years or more at any time during the previous year)

Net Income Range

Rate of Income-tax

Assessment Year 2021-22

Assessment Year 2020-21

Up to Rs. 3,00,000

-

-

Rs. 3,00,000 to Rs. 5,00,000

5%

5%

Rs. 5,00,000 to Rs. 10,00,000

20%

20%

Above Rs. 10,00,000

30%

30%

Now, let's look at the tax structure as per new regime Check the Source's Here.

Total Income (Rs)

Rate

Up to 2,50,000

Nil

From 2,50,001 to 5,00,000

5%

From 5,00,001 to 7,50,000

10%

From 7,50,001 to 10,00,000

15%

From 10,00,001 to 12,50,000

20%

From 12,50,001 to 15,00,000

25%

Above 15,00,000

30%

✅ What are the Opting for new tax regime? Know the conditions

Taxpayers choosing to file tax under the new tax regime will have to give away few exemptions and deductions, which were available in the existing old tax regime. Although there are 70 deductions and exemptions that taxpayers need to forgo, below are the most common ones:

What's not allowed under new tax rate regime:

  • Leave Travel Allowance (LTA) for salaried employees
  • Daily expenses
  • Relocation allowance
  • House Rent Allowance (HRA)
  • Children education allowance
  • Conveyance allowance
  • Helper allowance
  • Interest on housing loan (Section 24)
  • Other special allowances [Section 10(14)]
  • Professional tax
  • Standard deduction on salary

What's retained under new tax rate regime:

  • Retirement benefits, gratuity etc.
  • Conveyance allowance for expenditure incurred for travelling for duties of an office
  • Transport allowance for specially-abled people
  • Education scholarships
  • Retrenchment compensation
  • Investment in Notified Pension Scheme under section 80CCD(2)
  • Depreciation u/s 32 of the Income-tax act except additional depreciation.

✅ What is the Income tax slab for women?

In the budget 2021-22, no specific tax exemptions were announced for women. A tax rebate of up to Rs 12,500 will be paid to those with a total income of up to Rs 5 lakh.

Provisions under Section 80 of the Income Tax Act allow citizens to claim deductions and save taxes under various sections. For instance, woman can claim income tax exemption on the premium paid for a health insurance policy under Section 80D of the act. The limit has been set at Rs 25,000 for a policy covering self, spouse and dependent children. Additional deductions are available if senior citizens are covered in the policy – a deduction of Rs 25,000 is available if parents below 60 years of age are covered in the policy and Rs 50,000 for parents above 60 years.

✅ Is income tax compulsory?

Filing income tax returns is compulsory and not filing returns will attract penalties. Additionally, it will act as a deterrent for procuring a loan, property registration or getting a travel visa.

As per the Income Tax Act, it is mandatory to file ITRs for these entities in India:

  1. Irrespective of whether individuals/firms made income or loss during the financial year
  2. Individuals who want to claim an income tax refund
  3. Those who want to set off and carry forward losses under a head of income
  4. Individuals with asset or financial interest located outside of India
  5. Individuals gaining income from property held under a trust for religious, charitable, or political purposes.
  6. NRIs whose income accrued in India exceeds Rs 2.5 lakh.

✅ Is there any standard deduction for FY 2020 21?

Yes, the Income Tax Act allows a standard deduction of Rs 50,000 to the income taxable under the head 'Salaries' for FY 2020-21. From FY 2020-21 (AY 2021-22) the deduction can only be claimed by an individual if he opts for the old tax regime. The amount of standard deduction cannot exceed the salary amount. The maximum amount of deduction will be Rs. 50,000/- or Salary amount whichever is lower.

Standard deduction is a tax benefit that can be claimed irrespective of the actual amount spent on Transport Allowance and Medical Allowance and is applicable to individuals earning a salary or pension income. It was introduced by the government in Union Budget 2018 in lieu of exemption of transport allowance and reimbursement of miscellaneous medical expenses. For FY 2019-20 & FY 2020-21, the limit of standard deduction was set at Rs 50,000.

✅ What is the 80C limit for 2020 21?

The exemption under section 80C of the Income Tax Act can be availed of up to Rs 1.5 lakh. The Section 80C of the Income Tax Act, 1961, helps you save taxes on various investments and expenses you make during the financial year. Fixed Deposits in Bank, Public Provident Fund deposits (PPF), investment in National Pension Scheme (NPS), Employees Provident Fund (EPF) and Equity Linked Savings Schemes (ELSS) are some of the avenues open for you to avail of deductions under section 80C.

However, if you opt for the new tax regime announced in the Union Budget last year, Section 80C deductions claimed for provident fund contributions, life insurance premium, school tuition fee for children and various specified investments such as ELSS, NPS, PPF cannot be claimed.

Disclaimer: The above-mentioned tax rates and tax benefits are subject to changes in tax laws. Please contact your tax consultant for an exact calculation of your tax liabilities.

 

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Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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