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Fincash » Income Tax Slab & Rate 2021-22

Income Tax Slab & Rate for FY 2022-23

Updated on December 1, 2022 , 138473 views

In India, income tax is charged based on an individual’s Income. These tax rates are based on the Range of income called income slabs. The more the income, more the tax. The tax slabs tend to undergo a change during every budget. In this article, we shall understand the tax based on slabs, categories of taxpayers, etc.

Union Budget 2022

No changes in income tax slabs or rates have been proposed.

With no change in the income tax slabs and rates and basic exemption limit. An individual tax payer will continue to pay the tax at the same rates applicable in FY 2020-21.

Income-Tax-Slab-Rate

Tax Slab

Finance Minister Nirmala Sitharaman has presented the Union Budget 2020 intending to increase income and boost purchasing power. As per her speech, a new slab has been restructured from INR 5 lakh onward.

You can check out the difference in slabs before and after the Union Budget 2020:

Income Range Per Annum Existing Tax Rate (2019-20) New Tax Rate (2020-21)
Upto INR 2,50,000 Exempt Exempt
INR 2,50,000 to 5,00,000 5% 5%
INR 5,00,000 to 7,50,000 20% 10%
INR 7,50,000 to 10,00,000 20% 15%
INR 10,00,000 to 12,50,000 30% 20%
INR 12,50,000 to 15,00,000 30% 25%
Above INR 15,00,000 30% 30%

Changes in Tax Exemptions and Deductions 2020

If you go by the new tax slab rates announced on 1st February 2020 then, you will not be eligible to claim the following tax benefits:

Tax exemptions have been left untouched:

  • Standard deduction on rent
  • Income from Life Insurance
  • Agricultural income
  • Retrenchment compensation
  • VRS proceeds
  • Leave encashment on retirement

Union Budget 2020: What's the Twist?

As per the new tax regime, you need to sacrifice as many as 100 tax exemptions under various sections of the Income Tax Act, including 80C.

But, the proposed slabs in the Union Budget 2020 are purely optional. It is up to the taxpayers to choose the old tax slabs or the new one. To make an opinion on the changes made, you need to do your tax calculations carefully and see which helps you save more.

Income Tax Slab & Rate for 2019-20 (AY 2020-21)

Here's the income tax slab rates FY 2019-2020 for-

  • Individuals & HUF (Age <60 years)
  • Senior Citizens (Age: 60-80 yrs)
  • Senior Citizens (Age > 80 yrs)
  • Domestic Companies

1. Individual Tax Payers & HUF (Less Than 60 Years Old)– I

Income Range Per Annum Tax Rate Health and Education Cess
Up to INR 2,50,000 No tax Nil
Above INR 2,50,000 to 5,00,000 5% 4% cess
Above INR 5,00,000 to 10,00,000 20% 4% cess
Above INR 10,00,000 to 50,00,000 30% 4% cess
Above INR 10,00,000 to 1 crore 30% + 10% surcharge 4% cess
Above INR 1 crore 30% +15% surcharge 4% cess

As per the amendments to Section 87(A), if your annual Taxable Income is lower than INR 5,00,000, you can avail the Tax Rebate. The existing laws made way for a 2,500 income tax rebate. However, the updated law ensured that the limit was increased to a 12,500 income tax rebate.

2. Senior Citizens (60 Years Old Or More but Less than 80 Years Old)

Income Range Per Annum Tax Rate FY 21 - 22 Health and Education Cess
Up to INR 3,00,000 No tax Nil
Above INR 3,00,000 to 5,00,000 5% 4% cess
Above INR 5,00,000 to 10,00,000 20% 4% cess
Above INR 10,00,000 to 50,00,000 30% 4% of cess
Above INR 50,00,000 to 1 crore 30% + 10% surcharge 4% of cess
Above INR 1 crore 30% +15% surcharge 4% cess

As per the amendments to Section 87(A), if your annual taxable income is lower than INR 5,00,000, you can avail the tax rebate. The existing laws made way for a 2,500 income tax rebate. However, the updated law ensured that the limit was increased to a 12,500 income tax rebate.

3. Senior Citizens (80 Years Old Or More )

Income Range Per Annum Tax Rate FY 21 - 22 Health and Education Cess
Up to INR 2,50,000 No tax Nil
Up to INR 5,00,000 No tax Nil
Above INR 5,00,000 to 10,00,000 20% 4% cess
Above INR 10,00,000 to 50,00,000 30% 4% cess
Above INR 50,00,000 to 1 crore 30% + 10% surcharge 4% cess
Above INR 1 crore 30% +15% surcharge 4% cess

4. Domestic Companies

Turnover Particulars Domestic Companies Firms
Income Tax for turnover upto INR 400 crores 25% 30%
Income Tax for turnover above INR 400 crores 30% 30%
Cess 3% + surcharge 3% + surcharge
Surcharge 7% if the income is more between INR 1 crore to 10 crore. And, income above INR 10 crore will be taxed 10% 12% of tax if the total income exceeds INR 1 crore

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How to Calculate Income Tax from Income Tax Slabs?

For illustration purpose, let’s assume a total taxable income of INR 8,00,000, and this income has been calculated by including income from all sources such as salary, interest income, and rental income. Deductions under Section 80 have also been reduced.

Now, let us calculate income tax for FY 2017-18 (AY 2018-19)-

Income Range Per Annum Tax Rate Tax Calculation
Income up to INR 2,50,000 No tax
Income from INR 2,50,000 – INR 5,00,000 5% (INR 5,00,000 – INR 2,50,000) INR 12,500
Income from INR 5,00,000 – 10,00,000 20% (INR 8,00,000 – INR 5,00,000) INR 60,000
Income more than INR 10,00,000 30% nil
Tax INR 72,500
Cess 4% of INR 72,500 INR 2,900
Total tax in FY 2017-18 (AY 2018-19) INR 75,400

Income Tax Slab & Rate for FY 2017-18 (AY 2018-19)

Here's the income tax slab rates FY 2018-19 for -

1. Individual Tax Payers & HUF (Less Than 60 Years Old)

Income Tax Slabs Tax Rate Health and Education Cess
Income up to INR 2,50,000* No tax
Income from INR 2,50,000 – INR 5,00,000 5% 3% of Income Tax
Income from INR 5,00,000 – INR 10,00,000 20% 3% of Income Tax
Income more than INR 10,00,000 30% 3% of Income Tax

*Income tax exemption limit for FY 2017-18 is up to INR 2,50,000 for individual & HUF other than those covered in 2 or 3.

2. Senior Citizens (60 Years Old Or More but Less than 80 Years Old)

Income Tax Slabs Tax Rate Health and Education Cess
Income up to INR 3,00,000* No tax
Income from INR 3,00,000 – INR 5,00,000 5% 3% of Income Tax
Income from INR 5,00,000 – INR 10,00,000 20% 3% of Income Tax
Income more than INR 10,00,000 30% 3% of Income Tax

*Income tax exemption limit for FY 2017-18 is up to INR 3,00,000 other than those covered in 1 or 3.

3. Senior Citizens (80 Years Old Or More)

Income Tax Slabs Tax Rate Health and Education Cess
Income up to INR 5,00,000* No tax
Income from INR 5,00,000 – INR 10,00,000 20% 3% of Income Tax
Income more than INR 10,00,000 30%

*Income tax exemption limit for FY 2017-18 is up to INR 5,00,000 other than those covered in 1 or 2.

4. Domestic Companies

Turnover Particulars Tax Rate
Gross turnover upto 50 Cr. in the previous year 2015-16 25%
Gross turnover exceeding 50 Cr. in the previous year 2015-16 30%

*In addition, cess and surcharge are levied as follows: Cess: 3% of corporate tax Surcharge. Taxable income is more than 1 Cr but less than 10 Cr- 7%, Taxable income is more than 10 Cr- 12%


Income Tax Slab & Rate for FY 2016-17 (AY 2017-18)

Here's the income tax slab rates FY 2018-19 for

1. Individual Tax Payers & HUF (Less than 60 Years Old)

Income Tax Slabs Tax Rate
Income up to INR 2,50,000* No tax
Income from INR 2,50,000 – INR 5,00,000 10%
Income from INR 5,00,000 – INR 10,00,000 20%
Income more than INR 10,00,000 30%

*Income tax exemption limit for FY 2016-17 is up to INR 2,50,000 other than those covered in 1 or 2.

2. Senior Citizens (60 Years Old Or More but Less than 80 Years Old)

Income Tax Slabs Tax Rate
Income up to INR 3,00,000* No tax
Income from INR 3,00,000 – INR 5,00,000 10%
Income from INR 5,00,000 – 10,00,000 20%
Income more than INR 10,00,000 30%

*Income tax exemption limit for FY 2016-17 is up to INR 3,00,000 other than those covered in 1 or 3.

3. Senior Citizens (80 Years Old Or More)

Income Tax Slabs Tax Rate
Income up to Rs 5,00,000* No tax
Income from Rs 5,00,000 – 10,00,000 20%
Income more than Rs 10,00,000 30%

Income tax exemption limit for FY 2016-17 is up to INR 5,00,000 other than those covered in 1 or 2.

4. Domestic Companies

Turnover Particulars Tax Rate
Gross turnover upto 5 Cr. in the previous year 2014-15 29%
Gross turnover exceeding 5 Cr. in the previous year 2014-15 30%

In addition, cess and surcharge are levied as follows: Cess: 3% of corporate tax Surcharge. Taxable income is more than 1Cr but less than 10 Cr- 7%. Taxable income is more than 10Cr- 12%.

Comparing Indian Tax Rates with Other Countries

As per the report by KPMG-

'A country’s personal income tax rate is only one indicator of how much tax an individual actually ends up paying on their income.'

Effective Income Tax and Social Security Rates on USD100,000 of Gross Income

Rank Country Effective income tax rate Effective employee social security rate
1 Beligium 33.9% 13.1
2 Greece 30.0% 16.5
3 Croatia 26.8% 19.5%
4 Italy 35.6% 9.6%
5 Germany 28.3% 15.5%
6 Denmark 42.1% 0.2%
7 Curacao 38.6% 3.4%
8 France 20.0% 22.0%
9 Senegal 42.0% 0.0%
10 Sint Maarten 37.4% 3.1%
11 Luxembourg 27.9% 12.5%
12 Netherlands 28.5% 11.8%
13 Portugal 28.9% 11.0%
14 India 27.3% 12.0%

countries-tax Source- KPMG's Individual Income Tax and Social Security Rate Survey 2012, KPMG International

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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AKHIL, posted on 8 Jan 21 11:33 AM

GOOD KNOWLEDGE

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