Income Tax Slabs & Rates
The Finance Minister introduced new tax regime in Union Budget, 2020 wherein there is an option for individuals and HUF (Hindu Undivided Family) to pay taxes at lower rates without claiming deductions under various sections. The following Income Tax slab rates are notified in new tax regime vs old tax regime:
|Income Tax Slab||Tax rates as per new regime||Tax rates as per old regime|
|₹0 - ₹2,50,000||Nil||Nil|
|₹2,50,001 - ₹ 5,00,000||5%||5%|
|₹5,00,001 - ₹ 7,50,000||₹12500 + 10% of total income exceeding ₹5,00,000||₹12500 + 20% of total income exceeding ₹5,00,000|
|₹7,50,001 - ₹ 10,00,000||₹37500 + 15% of total income exceeding ₹7,50,000||₹62500 + 20% of total income exceeding ₹7,50,000|
|₹10,00,001 - ₹12,50,000||₹75000 + 20% of total income exceeding ₹10,00,000||₹112500 + 30% of total income exceeding ₹10,00,000|
|₹12,50,001 - ₹15,00,000||₹125000 + 25% of total income exceeding ₹12,50,000||₹187500 + 30% of total income exceeding ₹12,50,000|
|Above ₹ 15,00,000||₹187500 + 30% of total income exceeding ₹15,00,000||₹262500 + 30% of total income exceeding ₹15,00,000|
New tax regime slab rates are not differentiated based on age group. However, under old tax regime the basic income threshold exempt from tax for senior citizen (aged 60 to 80 years) and super senior citizens (aged above 80 years) is ₹ 3 lakh and ₹ 5 lakh respectively.
However, under new tax regime person cannot claim up to 70 income tax deductions while calculating taxes. Hence, every person has to make his/her own calculation as per old and new tax regime and calculate which one is beneficial based on type of investments made and returns earned on those investments.
Consider an example, a person aged 35 years has the total income of ₹11, 00,000 and has made the investment under section 80C of ₹1, 50,000 and under Section 80CCD of ₹50,000. He has claimed income tax deduction with medical and Leave travel allowance of ₹50000 and HRA of ₹1,50,000 The tax payable under new and old tax regime is as follows:
|Particulars||New regime||Old regime|
|Gross total income||₹ 11,00,000||₹ 11,00,000|
|Less: Deductions under 80C||₹ 0||₹ 1,50,000|
|Less: Standard Deduction (Medical & Travel Allowance)||₹ 0||₹ 50,000|
|Less: Deductions under 80CCD||₹ 0||₹ 50,000|
|Less : HRA deduction as per section 10(13A)||₹ 0||₹ 1,50,000|
|Taxable Income||₹ 11,00,000||₹ 7,00,000|
|Taxes payable as per slab rates|
|₹0 - ₹2,50,000||₹ 0||₹ 0|
|₹2,50,001 - ₹ 5,00,000||₹ 12,500||₹ 12,500|
|₹5,00,001 - ₹ 7,50,000||₹ 25,000||₹ 40,000|
|₹7,50,001 - ₹ 10,00,000||₹ 37,500||₹ 0|
|₹10,00,001 - ₹12,50,000||₹ 20,000||₹ 0|
|Total taxes||₹ 95,000||₹ 52,500|
✅ What is taxable* income in India?
✅ Is the due date for filing tax return same for all taxpayers?
✅ What is the time period considered for the purposes of income tax?
✅ Do I need to file Income Tax Return (ITR) if my annual income is below ₹ 2.5 lakh?
✅ Are there separate slab rates for males and females?
✅ Are there separate slab rates for different age groups?
✅ Will my income be taxed if I am an agriculturist?
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*Tax benefits under the policy are subject to conditions under Section 80C, 80D, 10(10D), Section 115BAC and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.
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Please note that the tax write-up above is for general understanding and reference. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information. Tax benefits/savings are subject to conditions of Section 80C, 80CCC, 80CCE, 10(10A), 10(10D), 115BAC and other provisions of the Income Tax Act, 1961. Tax laws are subject to amendments from time to time. ICICI Prudential Life Insurance Company Limited expressly disclaims any liability to any person, if tax benefits stated above are denied to the customer
Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.
ADVT No - W/II/3266/2018-19