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Latest Income Tax Slab Rates (Updated)

Updated on: 29 Jun, 2022 07:12 PM

Check Income Tax Slab for previous years: FY 2022-23 , 2021-22 & 2020-21
Latest income tax slab rates in India for Individuals, Company, NRI, HUF, BOI, AOP, LLP, Local Authority, co-operative society.

In India, we have a progressive method of taxation i.e. higher income higher the tax payable. To govern the same, taxation in India is determined based on Income Tax slabs The applicability of the Income Tax Slab depends on various factors, major of such are - residential status, the quantum of income, type of assessee and age.

Income Tax Slab Rates for FY 2020-21 (AY 2021-22) , FY 2021-22 (AY 2022-23) & FY 2022-23 (AY 2023-24)

If Person is Resident Individual or HUF: -

Income of the assessee Rate of Tax under Existing Regime for FY 22-23, 21-22 and 20-21 (i.e, AY 23-24, 22-23 & 21-22) New Regime Slab Rates for FY 22-23, 21-22 and 20-21 (i.e, AY 23-24, 22-23 & 21-22)
Individuals with age less than 60 years or HUF Individuals with age 60years or more but less than 80 years Individuals with age 80 years or more Applicable for All Individuals or HUF
Rs 0.0 to Rs 2.5 Lakhs NIL NIL NIL NIL
Rs 2,50,001 to Rs 3.00 Lakhs 5% (tax rebate u/s 87a is available) NIL NIL 5% (tax rebate u/s 87a is available)
Rs. 3,00,001 to Rs 5.00 Lakhs 5% (tax rebate u/s 87a is available) NIL
Rs. 5,00,001 to Rs 7.5 Lakhs 20% 20% 20% 10%
Rs 7,50,001 to Rs 10.00 Lakhs 20% 20% 20% 15%
Rs 10,00,001 to Rs. 12.50 Lakhs 30% 30% 30% 20%
Rs. 12,50,001 to Rs. 15.00 Lakhs 30% 30% 30% 25%
Exceeding Rs. 15 Lakhs 30% 30% 30% 30%
Note:
1. In Addition to basic Income Tax as discussed above , Followings are also to be taken care of:-
- Surcharge: Surcharge is levied on the amount of income-tax at following rates if total income of an assessee exceeds specified limits:-
Rs. 50 Lakhs to Rs. 1 Crore Rs. 1 Crore to Rs. 2 Crores Rs. 2 Crores to Rs. 5 Crores More Than 5 Crores
10% 15% 25% 37%
- Health & Education Cess @4%
- Rebate u/s 87A (no tax will be payable on total income upto Rs.5 lakh in both regimes)
2. Certain income tax exemptions and deductions like section 80C, 80D,80TTB, HRA etc are available in the OLD tax regime but will not be available under the new tax regime.

If Person is Non-Resident Individual: -

Income of the assessee Rate of Tax under Existing Regime for FY 22-23, 21-22 and 20-21 (i.e, AY 23-24, 22-23 & 21-22) New Regime Slab Rates for FY 22-23, 21-22 and 20-21 (i.e, AY 23-24, 22-23 & 21-22)
Rs 0.0 to Rs 2.5 Lakhs NIL NIL
Rs 2,50,001 to Rs 5.00 Lakhs 5%  5% 
Rs. 5,00,001 to Rs 7.5 Lakhs 20% 10%
Rs 7,50,001 to Rs 10.00 Lakhs 20% 15%
Rs 10,00,001 to Rs. 12.50 Lakhs 30% 20%
Rs. 12,50,001 to Rs. 15.00 Lakhs 30% 25%
Exceeding Rs. 15 Lakhs 30% 30%
Note:
Surcharge & cess also applicable here as in case of resident.

If Person is AOP/BOI/Artificial Judicial Person: -

Income of the assessee Rate of Tax under Existing Regime for FY 22-23, 21-22 and 20-21 (i.e, AY 23-24, 22-23 & 21-22)
Rs 0.0 to Rs 2.5 Lakhs NIL
Rs 2,50,001 to Rs 5.00 Lakhs 5% 
Rs. 5,00,001 to Rs 10.00 Lakhs 20%
Above 10.00 Lakhs 30%

In case of a Domestic Company: -

Domestic Company NORMAL TAX RATE 
Assessment Year 2021-22 Assessment Year 2022-23
Where its total turnover or gross receipt during the previous year 2018-19 does not exceed Rs. 400 crore 25% NA
Where its total turnover or gross receipt during the previous year 2019-20 does not exceed Rs. 400 crore NA 25%
Any other domestic company 30% 30%

Also, the Government introduced special tax rates for domestic companies under various sections, these can be summarized as:-

Domestic Company SPECIAL TAX RATES 
Assessment Year 2021-22 Assessment Year 2022-23
Where it opted for section 115BA 25% 25%
Where it opted for Section 115BAA 22% 22%
Where it opted for Section 115BAB 15% 15%

Note:
1. In Addition to basic Income Tax as discussed above, Followings are also to be taken care of:-
- Surcharge: Surcharge is levied on the amount of income-tax at following rates if total income of an assessee exceeds specified limits:-
Rs. 1 Crore to 10 Crores Above Rs. 10 Crore
7% 12%
- Health & Education Cess @4%
2. MAT Provisions as per section 115JB would also be applicable while calculating tax payable.

If Person is Foreign Company: -

Nature of Income Tax Rate
Royalty received from Government or an Indian concern in pursuance of an agreement made with the Indian concern after March 31, 1961, but before April 1, 1976, or fees for rendering technical services in pursuance of an agreement made after February 29 1964, but before April 1, 1976 and where such agreement has, in either case, been approved by the Central Government 50%
Any other income 40%
Note:
1. In Addition to basic Income Tax as discussed above, Followings are also to be taken care of:-
- Surcharge: Surcharge is levied on the amount of income-tax at following rates if total income of an assessee exceeds specified limits:-
Rs. 1 Crore to 10 Crores Above Rs. 10 Crore
2% 5%
- Health & Education Cess @4%
2. MAT Provisions as per section 115JB would also be applicable while calculating tax payable.

What is the concept of the new tax regime?

A new tax slab has been introduced in Budget 2020 which will be effective from 1 April 2020. This new income tax slab has lower rates of tax for higher incomes. It allows you to lower your tax liability subject to certain conditions and is optional.

So, If you choose to calculate your taxes using the new tax regime, the specified deductions and exemptions available under the Income Tax Act, 1961 would not be available. Under the old tax regime, however, the deductions and exemptions would be available.


What are the exemptions/deductions unavailable under the new tax regime?

The budget has removed 70 of the available 100 exemptions. The following exemptions and deductions are some of the most important ones which would not be available if the new tax slab is chosen for tax calculation –

  1. Standard deduction of INR 50,000 from salary income under Section 16
  2. House Rent Allowance under Section 10 (13A)
  3. Leave Travel Allowance under Section 10(5)
  4. Allowances under Section 10(14)
  5. Food coupons and other tax-free allowances and perquisites
  6. Deductions under Chapter VI A of the Income Tax Act like Section 80C, 80D, 80TTA, etc.
  7. Deduction for home loan interest paid for self-owned house property under Sections 24 (b) and Section 80EEA

Which are the Exemptions and deductions still available under the new tax regime?

The following deductions and exemptions would be available under the new tax regime –

  1. Employer’s contribution to the NPS for up to 10% of your salary under Section 80CCD (2) [ 14% in case of Central Govt employee]
  2. Standard deduction of 30% of net rental income if house property is let out.
  3. Home loan interest paid can be deducted from the rental income from house property. However, loss from the House Property head can not be set off from any other head of income.
  4. Transport allowance exemption will be available to Divyang employees to meet the day to day travel expenses from the workplace to home.
  5. Conveyance allowance will be allowed to meet the expenditure on the conveyance for the purpose of performing the official duty.
  6. Allowances granted will be allowed to meet the cost of travelling on tour or on transfer to the employees.
  7. Daily allowance granted for day to day ordinary expenses in case of absence from his / her normal place of duty.

What are the benefits or disadvantages of opting for both tax regimes?

The various benefits and disadvantages of old and new tax regimes include

Benefits Disadvantages
OLD TAX REGIME
Option to avail around 70 exemptions and deductions under the Income Tax Act Investment only in specified options were required to claim the tax benefit.
Practice to submit false disclosures for investment proofs is prevalent
NEW TAX REGIME
Tax Rates Reduced  Not attractive to those who were already investing and have binding premiums
No major tax saving options given, increasing cash flow in hands of taxpayers

Summary for new tax regime

The bottom line comes down to numbers. Before deciding on which regime is suitable for you, you need to calculate your tax liability under both the regimes with and without deductions and exemptions. The regime which gives you the lowest tax liability would be better depending on your requirements. To understand better which tax regime is suitable for which tax slab and to calculate the tax liability under both tax regimes you can use our TAX LIABILITY CALCULATOR which provides tax liability for both the new tax regime and old tax regime.


Income Tax Slab

FAQs on Income Tax Slab Rate

Q- How to calculate Tax from the tax slab?

In order to understand the process of calculation of income tax payable, one needs to first select the Slab rates applicable and after that simple mathematical calculation as shown below would work,
Let’s consider the calculation of Mr Abhishek with income Rs. 9,50,000 under the old tax regime:

Mr. Abhishek
Applicable Tax Slab Applicable Tax Rate Tax Amount
2.5 lakhs 0% 0
i.e., 0% of 250000
(250000-0)
2,50,001 to 5,00,000 5% 12,500
i.e, 5% of 250000
(500000-250000)
5,00,001 to 10,00,000 20% 90,000
i.e, 20% of 450000
(950000* – 500000)
Basic Tax
Cess @ 4%
Total Tax
1,02,500
4,100
1,06,600

* Here, as the income of Mr. Abhishek is Rs. 9,50,0000 so the tax would be calculated only up to that amount.


Q- What are the new income tax slabs proposed in the new tax regime by Budget 2020?

As per the new optional tax structure, an individual or HUF can choose to pay income tax at the following rates for FY 2020-21 (AY 2021-22)

Pay Income TaxRates
Upto Rs 2.5 Lakhs Nil
Above 2.5 Lakhs to 5 Lakhs 5%
Above 5 Lakhs to 7.5 Lakhs 10%
Above 7.5 Lakhs to 10 Lakhs 15%
Above 10 Lakhs to 12.50 Lakhs 20%
Above 12.50 Lakhs to 15 Lakhs 25%
More than 15 Lakhs 30% Rate Continues

Q- What are the deductions and exemptions available under the new income tax regime?

Budget 2020 pronounced a new income tax structure that is optional for the individuals or HUF. The new reduced income tax rates can be opted for if the taxpayer is ready to forego all major deductions and exemptions available under the income tax act except 80CCD(2), 80JJAA


Q- Is rebate u/s 87A available under the new income tax structure?

Yes, in lieu of any specific exclusion we can say that rebate u/s 87A amounting to Rs 12,500 is also available under the new income tax regime introduced in Budget 2020.


Q- Can I change the income tax regime applicable every year?

The selection of the regime CAN BE CHANGED every year by the salaried taxpayer. In case such an individual or HUF is also having income from business then this selection is not allowed to be changed every year.


Q- Is surcharge applicable under the new tax regime for Individuals or HUF under income tax?

Yes, the Surcharge will still be applicable under the new tax regime for Individuals or HUF. The surcharge rates are the same as that of the last financial year(FY 2019-20).


Q- Is health and education cess applicable under the new tax regime?

Health and education cess @4% will also apply under the new income tax regime.


Q- Which tax slab shall I choose for FY 2020-21 (AY 2021-22)?

Indian income tax structure has witnessed for the first time applicability of two slab rates simultaneously. As a result of which a lot of confusion has been created amongst the taxpayers. One of the most important criteria while making the choice of applicable tax slab will be whether you wish to claim exemptions and deductions available under the old income tax structure. But that should not form the only criteria lets get a better comparative understanding of these tax regimes.


Q- What will be the impact of the new income tax regime on my Income Tax Calculation?

A comparative analysis of income tax calculation for FY 2020-21 (AY 2021-22) under the existing tax slab and the new income tax slabs introduced in Budget 2020 can be understood by comparing taxable income under both scenarios. To know the detailed calculation please refer.


Q- How to round off total income before computing tax liability?

As per section 288A, total income computed in accordance with the provisions of the Income-tax Law shall be rounded off to the nearest multiple of ten. The following points should be kept in mind while rounding off the total income:

First, any part of the rupee consisting of any paisa should be ignored. After ignoring paisa, if such amount is not in multiples of ten, and the last figure in that amount is five or more, the amount shall be increased to the next higher amount which is in multiple of ten and if the last figure is less than five, the amount shall be reduced to the next lower amount which is in multiple of ten and the amount so rounded off shall be deemed to be the total income of the taxpayer.?


CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.

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