The finance is important factor of day-to-day life and managing and maintaining it is also important factor. How to invest, save and tax saving is essentials to lead financial freedom in life. Financial world is always evolving to adopt the new things and new changes which individual is not aware about it. The idea of understanding income tax is something which is unknown or partially known to common public in India.
To help them understand income tax, it is better to educate them about income tax, income tax slab, types of income and rules of taxation etc. Income tax slab has been one of major highlights of Union Budget of 2021. This way, individual will know what exactly tax slab is and what government plans on doing it.
What is Income Tax Slab?
In layman language, Income tax is tax amount that is paid by individual, group or entities based on their level of income and gains during particular financial year. This income could be actual, notional or even both. For this year the income tax rate is decided and declared by government of India and is based on the union budget of 2021 income tax. In India, there is tax slab system which means tax rates are given to each person based on their income.
In nutshell, a person who earn higher has to pay higher income tax. The amount invested into various tax saving schemes is deducted from gross income. The idea behind tax slab is to have fair tax structure in India.
Types of Income Considered in Tax Slab.
Income Tax Slab for 2021-2022
Due to pandemic crisis on economy, the central government had not considered tax slab to change for the FY 2021-2022.
Here is how the income tax slab will look for FY 2021-2022.
Income Tax slab for individuals for below 60 years:
| 1st OPTION | 2nd OPTION | ||
| Old Income Tax Slab Regime | New Income Tax Slab Regime | ||
| Up to Rs. 2,50,000 | NIL | Up to Rs. 2,50,000 | NIL |
| Rs. 2,50,001 to Rs. 5,00,000 | 5% | ||
| Rs. 2,50,001 to Rs. 5,00,000 | 5% | Rs. 5,00,001 to Rs. 7,50,000 | 10% |
| Rs. 7,50,001 to Rs. 10,00,000 | 15% | ||
| Rs. 5,00,001 to Rs. 10,00,000 | 20% | Rs. 10,00,001 to Rs. 12,50,000 | 20% |
| Rs. 12,50,001 to Rs. 15,00,000 | 25% | ||
| Above Rs. 10,00,000 | 30% | Above Rs. 15,00,000 | 30% |
Income Tax Slab for Individuals between 60 years and 75 years:
| 1st OPTION | 2nd OPTION | ||
| Old Income Tax Slab Regime | New Income Tax Slab Regime | ||
| Up to Rs. 3,00,000 | NIL | Up to Rs. 2,50,000 | NIL |
| Rs. 2,50,001 to Rs. 5,00,000 | 5% | ||
| Rs. 3,00,001 to Rs. 5,00,000 | 5% | Rs. 5,00,001 to Rs. 7,50,000 | 10% |
| Rs. 7,50,001 to Rs. 10,00,000 | 15% | ||
| Rs. 5,00,001 to Rs. 10,00,000 | 20% | Rs. 10,00,001 to Rs. 12,50,000 | 20% |
| Rs. 12,50,001 to Rs. 15,00,000 | 25% | ||
| Above Rs. 10,00,000 | 30% | Above Rs. 15,00,000 | 30% |
Income Tax Slab for Individuals above 80 years:
| Up to 5,00,000 | NIL |
| Rs. 5,00,001 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
Income Tax Slab for Individuals who are non-residents:
| 1st OPTION | 2nd OPTION | ||
| Old Income Tax Slab Regime | New Income Tax Slab Regime | ||
| Up to Rs. 2,50,000 | NIL | Up to Rs. 2,50,000 | NIL |
| Rs. 2,50,001 to Rs. 5,00,000 | 5% | ||
| Rs. 2,50,001 to Rs. 5,00,000 | 5% | Rs. 5,00,001 to Rs. 7,50,000 | 10% |
| Rs. 7,50,001 to Rs. 10,00,000 | 15% | ||
| Rs. 5,00,001 to Rs. 10,00,000 | 20% | Rs. 10,00,001 to Rs. 12,50,000 | 20% |
| Rs. 12,50,001 to Rs. 15,00,000 | 25% | ||
| Above Rs. 10,00,000 | 30% | Above Rs. 15,00,000 | 30% |
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