Income Tax Slabs FY 2020-21, AY 2021-22 & Tax Rates for FY 2020-21/ FY 2019-20/ FY 2018-19

Budget Review 2021: It is proposed to exempt seniors from completing income tax returns if pension and interest income is their only annual source of income. Section 194P was recently introduced to force banks to withhold tax on older persons over 75 pensioners and interest from the bank.

Live updates for the 2021 budget will be announced on February 1, 2021 with FM host Nirmala Sitharaman

The deadline for submitting income tax returns has been extended to 10 January 2021 to include AY 2020-21 tax. For tax examination cases and TP cases, the deadline is 15 February 2021. Income tax is levied on the income of the general public, HUF, joint ventures, LLPs and Corporates in terms of the Income Tax Act of India. In the case of individuals, taxes are levied on the slab if their income exceeds the minimum wage (known as the basic exemption limit).

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1. What is income tax slab ?

Indian Income tax on individual taxpayers on the basis of the slab scheme. The slab system refers to different tax rates determined by different income categories. It means that tax rates continue to rise with the increase in taxpayer income. This type of tax allows for sustainable and fair tax systems in the country. Such income tax ladders are subject to change within each budget. These slab rates differ from different taxpayers' categories. Income tax is divided into three categories of “individual taxpayers such as:

  • People (under the age of 60) including residents and non-residents
  • Older Citizens (aged 60 to 80)
  • Top Resident Super Citizens (over 80)

2. Income Tax Slab Rates for FY 20-21 (AY 2021-22 )

a. Income tax slab rate for FY 2020-21 (AY 2021-22), New Tax regime – Why is it optional?

In this new state, taxpayers have an OPT option:

  1. Paying income tax at the lowest rates in terms of the New Tax Act provided that they do not pay attention to something allowable exemptions and deductions earned under income tax, Or
  2. To continue paying taxes below existing tax rates.The inspector may receive discounts as well exemption from occupation of the old government and payment of taxes at the highest available rate.

Income tax slab rate FY 2020-21 (AY 2021-22) – Applicable for New Tax regime

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%

Difference of tax slab rates between New tax regime vs Old Tax regime

NOTE:
  • Please note that the tax rates on the new tax system are the same for all categories Individuals, namely, Individuals and HUF up to 60 years of age, Older Citizens over 60 years of age up to 80 years, and older adults over 80 years of age. So no basic release has been increased The limited benefit will be available to older persons and older persons in the new Tax system.

  • People with a taxable income of less than or equal to Rs 5 lakh will be eligible for tax discount u / s 87A i.e. tax debt will not be available to such person in both - New and old / existing tax methods.

  • The basic release limit for NRIs is Rs 2.5 Lakh regardless of age.

  • Additional Health and Education Fees at 4% will be added to income tax case in all cases. (increased from 3% from FY 18-19)

  • The charge applies according to the tax rates below all the categories mentioned above:

    1. 10% of total income tax> Rs.50 lakh

    2. 15% of total income tax> Rs.1 crore

    3. 25% of total income tax> Rs.2 crore

    4. 37% of total income tax> Rs.5 crore

b. Income tax slab rate for Old Tax regime – FY 2020-21 (AY 2021-22)

Select your Age Group:  
Income tax slabs for Individual aged below 60 years & HUF
NOTE:
  • Tax exemption limit of Rs.2,50,000 Per Person, HUF is under 60 years of age and NRIs for FY 2018-19

  • Another 4% Health and education fund will apply to tax revenue listed as above.

  • Payment:

    1. 10% of income tax, when total income exceeds Rs.50 lakh up to Rs.1 crore.

    2. 15% of income tax, when total revenue is more than Rs.1 million.

c. Income tax slab rates for FY 2020-21 (AY 2021-22) – New tax regime & Old Tax regime
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 Slab Existing Regime Slab Rates for FY 20-21 (AY 21-22) New Regime Slab Rates for FY 20-21 (AY 21-22)
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 the permit rates on the New Tax system will have to give up certain exemptions and deductions available from the old tax system. In total there are 70 deductions and unrestricted exemptions, of which the most commonly used are listed below:

List of common Exemptions and deductions “ not allowed” under New Tax rate regime
  1. Leave Travel Allowance (LTA)

  2. House Rent Allowance (HRA)

  3. Conveyance allowance

  4. Daily expenses in the course of employment

  5. Relocation allowance

  6. Helper allowance

  7. Children education allowance

  8. Other special allowances [Section 10(14)]

  9. Standard deduction on salary

  10. Professional tax

  11. Interest on housing loan (Section 24)

  12. Deduction under Chapter VI-A deduction (80C,80D, 80E and so on) (Except Section 80CCD(2))

List of deductions “allowed” under new Tax rate regime
  1. Transport allowance for specially abled people

  2. Conveyance allowance for expenditure incurred for travelling to work

  3. Investment in Notified Pension Scheme under section 80CCD(2)

  4. Deduction for employment of new employees under section 80JJAA

  5. Depreciation u/s 32 of the Income-tax act except additional depreciation.

  6. Any allowance for travelling for employment or on transfer

e. Example for Old Tax regime Vs New Tax regime & which is better?

The new tax system can greatly benefit middle-class taxpayers with a taxable income of up to Rs 15 lakh. The old empire is the best option for high-income earners.

The new income tax system benefits low-income people. Since the new state provides seven pieces of low tax, anyone who pays taxes without seeking tax deduction can benefit by paying a lower amount of tax under the new tax regime. For example, check the amount of income before deductions up to Rs 12 lakh will have a higher tax debt under the old system if they have invested less than Rs 1.91 lakh. So, if you are investing less in tax savings programs, adopt a new system.

That being said, if you already have a financial plan to create wealth by investing in tax-saving tools; health insurance and Mediclaim; to pay for children's tuition; repayment of EMIs with education loan; home purchase with home loan; and so on, the old government is helping to withstand high taxes and lower tax exemptions.

According to the above and considering the new income tax system, if taxpayers want to choose the tax rates in the contract, they can review both of these laws. Therefore, it is advisable to do a comparative evaluation and analysis under both principles and to choose the one that is most beneficial as it may differ from person to person.

Let's take the example of comparing the Old & New Tax Checker system with an income of Rs 10 Lakh.

Mr. Ravi has a salary of Rs 10 lakh. The total investment / s 80C is Rs 1.7 lakh under ELSS, PF, LIC premium and the main mortgage loan installment. In addition he pays for medical insurance for himself and his wife for Rs 28000. If he chooses the old tax plan, then he can apply for the above deduction, however if he wishes to go to the new tax system otherwise this deduction will not be available. He has paid a mortgage interest of Rs 75000 on FY 20-21. Let's take a look at tax evasion in both of these laws

Particulars Old Tax Regime (Rs) New Tax Regime (Rs)
Gross Income 1,000,000 1,000,000
Deductions:    
u/Sec: 80C 150,000
u/Sec: 80D 25,000
u/Sec: 24(b) 75,000
Taxable Income 750,000 1,000,000
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%
Income Tax 62,500 75,000
Cess @ 4% 2,500 3,000
Total Tax Outgo 65,000 78,000

As the example above, if the total revenue exceeds Rs 10 lakh or also the deductions / S 80C, 80D, and 24 (b) of the Income Tax Act are available, then the old state benefits greatly from a tax planning perspective. Although for people in the low-income group, earning an amount of Rs 5 lakh; the new tax slab system may be beneficial.

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 opt for a new tax plan and expand his or her employer early FY 2020-21. Employees can change the selection option annual tax plan

But if a new tax slab system is selected earlier this year, it will not be so changed at any time during the year for TDS purposes, however the option may be changed at the time of submission of income tax return.

Income from Business & Profession In case of Business or profession income , the option to choose between the tax regimes is available 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 opts for section 115BAB (not covered in section 115BA and 115BAA) & is registered on or after October 1, 2019 and has commenced manufacturing on or before 31st March, 2023.

15%

Company opts for Section 115BAA , wherein the total income of a company has been calculated without claiming specified deductions, incentives, exemptions and additional depreciation

22%

Company opts for section 115BA registered on or after March 1, 2016 and engaged in manufacture of any article or thing and does not claim deduction as specified in the section clause.

25%

Turnover or gross receipt of the company is less than Rs. 400 crore in the previous year 2018-19

25% 25%

Any other domestic company

30% 30%

Please refer to the new phases to evaluate the performance of additional authorized tax rates.

  • Additional Health and Education Fees at 4% will be added to income tax case in all cases.

  • Corporate tariffs are as follows:
    1. 7% income tax when total income> Rs 1 crore
    2. 12% income tax when total income> Rs.10 crore
    3. 10% of income tax when a domestic company opted to receive sections 115BAA and 115BAB

3. Income tax slab rates for FY 2019-20

Select your Age Group:  

Income tax slab for Individual aged below 60 years & HUF

Income Tax Slab Tax Rates for Individual & HUF Below the Age Of 60 Years & NRIs
Up to ₹2,50,000* Nil
₹2,50,001 to ₹5,00,000 5%
₹5,00,001 to ₹10,00,000 20%
Above ₹10,00,000 30%
NOTE:
  • 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

  • Surcharge:

    – 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.

Invest Now & Save Upto ₹ 46,800 on Taxes

4. Income Tax Slab Rates for FY 2018-19

Select your Age Group:  

Income tax slab for Individual aged below 60 years & HUF

Income Tax Slab Tax Rates for Individual & HUF Below the Age Of 60 Years
Income up to Rs 2,50,000* No tax
Income from Rs 2,50,000 – Rs 5,00,000 5%
Income from Rs 5,00,000 – 10,00,000 20%
Income more than Rs 10,00,000 30%
NOTE:
  • An additional 4% Health & education cess will be applicable on the tax amount calculated as above

  • Surcharge applicability:

    – 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.

Invest Now & Save Upto ₹ 46,800 on Taxes

5. Income Tax Slab Rates for FY 2017-18

Select your Age Group:  

Income tax slab for Individual below 60 years & HUF

Income Tax Slab Tax Rates for Individual & HUF Below the Age Of 60 Years
Income up to Rs 2,50,000* No tax
Income from Rs 2,50,000 – Rs 5,00,000 5%
Income from Rs 5,00,000 – 10,00,000 20%
Income more than Rs 10,00,000 30%
NOTE:
  • An additional 4% Health & education cess will be applicable on the tax amount calculated as above

  • Surcharge applicability:

    – 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.

Invest Now & Save Upto ₹ 46,800 on Taxes

6. How to Calculate Income Tax from Income Tax Slabs?

Rohit has a taxable income of Rs 8,00,000. This income is calculated by adding income from all sources such as income, rental income, and interest income. Deductions under section 80 have also been reduced. Rohit wants to know his FY taxpayers 2018-119 (AY 2019-2019).

Income Tax Slabs Tax Rate Tax Calculation
*Income up to Rs 2,50,000 No tax  
Income from Rs 2,50,000 – Rs 5,00,000 5% (Rs 5,00,000 – Rs 2,50,000) Rs 12,500
Income from Rs 5,00,000 – 10,00,000 20% (Rs 8,00,000 – Rs 5,00,000) Rs 60,000
Income more than Rs 10,00,000 30% nil
Tax   Rs 72,500
Cess 4% of Rs 72,500 Rs 2,900
Total tax in FY 2017-18 (AY 2018-19)   Rs 75,400

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.


 

CEO Krishna Gopal

Krishna Gopal Varshney is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Myitronline.com. Myitronline is amongst the top emerging startups of Asia and authorized ERI by the Income Tax Department. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. ”

Krishna Gopal Varshney
Co-founder & CEO