Income Tax Slabs & Rates
The Finance Minister introduced a 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 the new tax regime vs the 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 the total income exceeding ₹ 5,00,000||₹ 12500 + 20% of the total income exceeding ₹ 5,00,000|
|₹ 7,50,001 - ₹ 10,00,000||₹ 37500 + 15% of the total income exceeding ₹ 7,50,000||₹ 62500 + 20% of the total income exceeding ₹ 7,50,000|
|₹ 10,00,001 - ₹ 12,50,000||₹ 75000 + 20% of the total income exceeding ₹ 10,00,000||₹ 112500 + 30% of the total income exceeding ₹ 10,00,000|
|₹ 12,50,001 - ₹ 15,00,000||₹ 125000 + 25% of the total income exceeding ₹ 12,50,000||₹ 187500 + 30% of the total income exceeding ₹ 12,50,000|
|Above ₹ 15,00,000||₹ 187500 + 30% of the total income exceeding ₹ 15,00,000||₹ 262500 + 30% of the total income exceeding ₹ 15,00,000|
New tax regime slab rates are not differentiated based on age group. However, under the old tax regime, the basic income threshold exempt from tax for senior citizens (aged 60 to 80 years) and super senior citizens (aged above 80 years) is ₹ 3 lakh and ₹ 5 lakh respectively.
However, under the new tax regime, a person up to the age of 70 cannot claim income tax deductions while calculating taxes. Hence, every person has to make his/her own calculation as per the old and new tax regimes and calculate which one is beneficial based on the type of investments made and returns earned on those investments.
Consider an example, a person aged 35 years has a total income of ₹ 11, 00,000/- and invested 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 regimes are as follows:
|Particulars||New regime||Old regime|
|Gross total income||₹ 11,00,000||₹ 11,00,000|
|Less: Deductions under Section 80C||₹ 0||₹ 1,50,000|
|Less: Standard Deduction (Medical & Travel Allowance)||₹ 0||₹ 50,000|
|Less: Deductions under Section 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 Sections 80C, 80D, 10(10D), 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.
Unlike traditional products, Unit Linked Insurance Products are subject to market risk, which affects the Net Asset Values & the customer shall be responsible for his/her decision. The names of the Company, Product names or Fund options do not indicate their quality or future guidance on returns. Funds do not offer guaranteed or assured returns.
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 Sections 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.
ADVT No - W/II/3266/2018-19