Income Tax Slabs: Tax levied by central Government on all incomes generated by individuals and businesses as per the income generated by them. Different tax rates are applied to different income group, which are defined as slabs according to Income Tax Act.
Here is the Income Tax Slab rates for Financial Year 2020-21 (Assessment Year 2021-22). These slabs are for resident Indian individuals under New Regime.
Income Tax Slabs
|Up to 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 and above||30%|
Apart from the slabs, the new Income Tax regime has also updated exemptions, deductions and cess.
Key important points are as:
- The tax calculated on the basis of such rates will be subject to health and education cess of 4%.
- Tax resident will have to give up certain exemptions and deductions once opted for new tax regime from FY 2020-21.
- This option to switch can only be exercised on or before the due date of filing return of income for FY 2020-21.
- Business taxpayer has to follow the regular income tax slabs.
- Some of the exemptions that will not be available once new tax regime is selected
- Leave Travel Allowance
- House Rent Allowance
- Interest on Housing Loan (sec 24)
- Children education allowances