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Income tax is a direct tax that applies to individuals earning income based on salary & other sources. The Finance Minister presents in the budget income tax rate every year. In this article, we will cover the income tax slab rate for FY 2021 – 22.
Income tax is a tax levied on taxpayers based on the slab system set by the government every year, and the slab rate is communicated to the public through a budget presented at the end of an FY.
The slab tax rate is different tax rates prescribed for various income ranges, which means the tax rates increases with an increase in the taxpayer’s income.
Income tax has classified 3 categories of individual taxpayers. The categories are:
The Income tax slab rate for an FY 2021 – 22 is:
Income Tax Slab
New regime Income Tax Slab Rate for FY 2020 – 21
(applies to all individuals & HUF)
Up to Rs. 2,50,000
Between Rs. 2,50,000 & Rs. 3,00,000
5% (tax rebate under section 87a is available)
Between Rs. 3,00,000 & Rs. 5,00,000
Between Rs. 5,00,000 & Rs. 7,50,000
Between Rs. 7,50,000 & Rs. 10,00,000
Between Rs.10,00,000 & Rs. 12,50,000
Between Rs. 12,50,000 & Rs. 15,00,000
More than Rs. 15,00,000
A few points to be noted:
The taxpayer has the option to choose either:
The old tax regime for FY 2021-22 for the category of taxpayers are:
Individuals less than 60 years
Senior citizens between 60 years & 80 years
Super senior citizens above 80 years
Between Rs. 2,50,000 & Rs. 5,00,000
Between Rs. 5,00,000 & Rs. 10,00,000
More than Rs. 10,00,000
There are few points to be noted:
The difference between the new & old tax regime is:
Existing regime tax rate slab for FY 2020-21& FY 2021-22
New regime tax rate slab for FY 2021-22
Resident Individuals & HUF less than 60 years of age & NRI
Resident Individuals & HUF above 60 years & less than 80 years
Resident Individuals & HUF above 80 years of age
Applies to all individuals & HUF
Between Rs. 2,50,000 &Rs. 3,00,000
5% (tax rebate u/s 87a is available)
Between Rs. 10,00,000 & Rs. 12,50,000
Let us understand how to calculate income tax from income tax slab rates through an example.
Akash has a total taxable income of Rs. 8 lakhs, calculated by including all the incomes from salary, rental, and interest income. The amount has also been deducted under section 80 of the Act.
Now, as per the income tax rate slab, the income tax is calculated as:
Income Tax Slabs
Income up to Rs. 2,50,000
Income between Rs. 2,50,000 & Rs. 5,00,000
5% (Rs. 5,00,000 – Rs. 2,50,000)
Income between Rs. 5,00,000 & Rs. 10,00,000
20% (Rs. 5,00,000 – Rs. 5,00,000)
Income more than Rs. 10,00,000
4% of Rs. 72,500
Total tax payable
Akash is an individual taxpayer, having Rs. 2, 50,000 as income tax exemption. For other taxpayers, i.e., senior & super senior citizens, Rs. 3, 00,000 & Rs. 5, 00,000 respectively, avail income tax exemption.
Income tax is levied on every taxpayer’s taxable income earned from salary, rent, or other sources. The tax is calculated based on the income tax slab rate. Thus, it is very important for the taxpayers to know about the slab rates.
Read our article:Faceless Hearing under Income Tax Act
Completed BA LLB from JEMTEC, School of Law, Greater Noida (Affiliated to GGSIP University, New Delhi). I have an experience of about 2 years in various fields of corporate laws, but I have a keen interest in researching on legal issues and to gain knowledge. I always strive to bring the best to work on what I do.
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