New Tax Rates And Slabs Under The New Tax Regime
The slab system is used to levy tax on individual taxpayers in India. The slab system simply implies the fact that diverse tax rates are prevalent for taxpayers having distinguished income ranges. The tax rate progressively increases with an increase in taxpayer’s income. These income tax slabs ideally undergo a change during every annual budget of the country.
From the Financial Year 2020-21, taxpayers can make their choice between two regimes of income tax, which are:
- The New Income Tax regime having lower rates, on the condition that the taxpayers forgo particular deductions and permissible exemptions that can be availed under income tax
- The Existing Tax regime where the taxpayer can avail exemptions and rebates like house rent allowance and LTC Cash Voucher Scheme, by pay paying tax at the existing higher rate
Latest income tax rates and slabs as per the new tax regime for FY 2020-21
| Income Tax Slab | Income Tax % |
|---|---|
| INR 0.0 – INR 2.5 Lakhs | NIL |
| INR 2.5 lakhs- INR 3.00 Lakhs | 5% (tax rebate u/s 87a is available) |
| INR. 3.00 lakhs – INR 5.00 Lakhs | 5% (tax rebate u/s 87a is available) |
| INR. 5.00 lakhs- INR 7.5 Lakhs | 10% |
| INR 7.5 lakhs – INR 10.00 Lakhs | 15% |
| INR 10.00 lakhs – INR. 12.50 Lakhs | 20% |
| INR. 12.5 lakhs- INR. 15.00 Lakhs | 25% |
- In the New Tax Regime, the tax rates are same for taxpayers across all categories, which includes:
- Individuals and HUF up to 60 years of age
- Senior citizens above 60 years and up to 80 years
- Super senior citizens above 80 years
As a result, senior and super senior citizens shall not be able to avail any increased basic exemption limit benefit.
- Individuals having a net taxable income lesser than INR 5 lakh shall be eligible for tax rebate u/s 87A . This basically means that the tax liability of these individuals would be nil.
- No matter their age, all NRIs shall have a basic exemption limit of INR 2.5 lakh.
- An added Health and Education cess shall be added to the income tax liability at the rate of 4% for all the cases.
- Under all the categories mentioned, surcharge shall be applicable as per the tax rates in the following points
- 10% of Income tax in the situation that the total income is lower than INR.50 lakh
- 15% of Income tax in the situation that the total income is lower than INR.1 crore
- 25% of Income tax in the situation that the total income is lower than INR.2 crore
- 37% of Income tax in the situation that the total income is lower than INR.5 crore
Our Commitment – Bringing Happiness to your face & make you deal rough times like a Champ.
ICAI empanels the GST Software developed by KDK Software | ANI
Forget TDS Return Filing hassles for life! with Zen TDS Software
About The Author
KDK Software
KDK is one of the Oldest name in Tax Compliance be it Income Tax, TDS or GST Software. KDK software is the preferred choice of Tax Practitioners and Corporates for their Tax Filing requirements. KDK Softwares founded in the year 2006, has become a Prominent Brand name in the Taxation / Tax Filing Industry.