In the Union Budget 2021, the central government had decided not to make changes in the Income Tax Slabs for FY 2020-21 and carry it on it the new FY 2021-22. So. I thought to write a blog post on Income Tax Slabs for FY 2021-22 (AY 2022-23).
Table of Contents
What is the Income Tax?
Income Tax is a direct tax in India. Income tax is levied directly on your income by the government. The income from your salary, business, profession, or other sources is taxed based on a slab system. Currently, there are different income tax rates for different slabs.
Primary Sources of Income
Income from the following sources is considered taxable in India:
1) Income from salary
2) From house property
3) Profits and gains of business and profession
4) Capital gains income
5) Income from other sources
Income Tax Slabs for FY 2021-22 (AY 2022-23)
In India, income tax is levied directly on the income of an individual taxpayer. It is charged as per income tax rates prescribed by the government of India in the budget every financial year.
At present, there are different tax rates for different slabs. The tax rates keep increasing with an increase in the income slab. These slabs tend to change the budget every financial year.
Categories of Individual Taxpayers
In India, the income tax rate on resident individuals varies based on their age. At present, there are three categories of individual taxpayers:
1. Individuals below the age of 60 years.
2. Senior citizens (Age above 60 years but below 80 years)
3. Super senior citizens (Age above 80 years)
Income Tax Slabs for FY 2021-22 (AY 2022-23)
The tables given below are the latest income tax slabs & rates applicable for the FY 2021-22 (AY 2022-23). The Union Budget 2020 has given the individuals two options to choose from from FY 2020-21 onwards. You can opt for the old tax rates or the new tax regime.
There are no separate slabs for men and women. At present, there are three different slabs based on age. Here is how the income tax slab will look for Financial Year 2021-22.
Income Tax Slabs for Individual below the age of 60 years
| Option 1 | Option 2 | ||
| Old Income Tax Slab | New Income Tax Slab | ||
| Income Slab | Tax Rate | Income Slab | Tax Rate |
| Up to Rs.2,50,000 | No Tax | Up to Rs.2,50,000 | No Tax |
| Rs.2,50,001 – Rs.5,00,000 | 5% | Rs.2,50,001 – Rs.5,00,000 | 5% |
| Rs.5,00,001 – Rs.10,00,000 | 20% | Rs.5,00,001 – Rs.7,50,000 | 10% |
| Rs.7,50,001 – Rs.10,00,000 | 15% | ||
| Above Rs.10,00,000 | 30% | Rs.10,00,001 – Rs.12,50,000 | 20% |
| Rs.12,50,001 – Rs.15,00,000 | 25% | ||
| Above Rs.15,00,000 | 30% | ||
For both the tax regime (Old and New)
Surcharge on Income Tax:
- @10%, where the total income exceeds Rs.50 lakhs up to Rs.1 crore.
- @15%, where the total income exceeds Rs.1 crore but below Rs.2 crores.
- @25%, where the total income exceeds Rs.2 crores but below Rs.5 crores.
- @37%, where the total income exceeds Rs.5 crores.
Health and Education Cess:
- Health and Education cess @4% on the income tax and applicable surcharge.
Rebate under Section 87A:
- No tax payable on total income up to Rs.5 lakh in both regimes.
Note: Some important exemptions and deductions like section 80C, 80CCD, 80D, 80TTB, HRA, etc will not be available under the new tax regime. However, the new tax regime is optional and you can continue with the old regime if you desire so.
Income Tax Slabs for Senior Citizens (Age above 60 years but below 80 years)
| Option 1 | Option 2 | ||
| Old Income Tax Slab | New Income Tax Slab | ||
| Income Slab | Tax Rate | Income Slab | Tax Rate |
| Up to Rs.3,00,000 | No Tax | Up to Rs.2,50,000 | No Tax |
| Rs.3,00,001 – Rs.5,00,000 | 5% | Rs.2,50,001 – Rs.5,00,000 | 5% |
| Rs.5,00,001 – Rs.10,00,000 | 20% | Rs.5,00,001 – Rs.7,50,000 | 10% |
| Rs.7,50,001 – Rs.10,00,000 | 15% | ||
| Above Rs.10,00,000 | 30% | Rs.10,00,001 – Rs.12,50,000 | 20% |
| Rs.12,50,001 – Rs.15,00,000 | 25% | ||
| Above Rs.15,00,000 | 30% | ||
For both the tax regime (Old and New)
Surcharge on Income Tax:
- @10%, where the total income exceeds Rs.50 lakhs up to Rs.1 crore.
- @15%, where the total income exceeds Rs.1 crore but below Rs.2 crores.
- @25%, where the total income exceeds Rs.2 crores but below Rs.5 crores.
- @37%, where the total income exceeds Rs.5 crores.
Health and Education Cess:
- Health and Education cess @4% on the income tax and applicable surcharge.
Rebate under Section 87A:
- No tax payable on total income up to Rs.5 lakh in both regimes.
Basic Exemption:
- Basic exemption under the new tax regime is 2.5 lakhs against 3 lakhs in the old tax regime.
Note: Some important exemptions and deductions like section 80C, 80CCD, 80D, 80TTB, HRA, etc will not be available under the new tax regime. However, the new tax regime is optional and you can continue with the old regime if you desire so.
Income Tax Slabs for Super Senior Citizens (Age above 80 years)
| Option 1 | Option 2 | ||
| Old Income Tax Slab | New Income Tax Slab | ||
| Income Slab | Tax Rate | Income Slab | Tax Rate |
| Up to Rs.5,00,000 | No Tax | Up to Rs.2,50,000 | No Tax |
| Rs.2,50,001 – Rs.5,00,000 | 5% | ||
| Rs.5,00,001 – Rs.10,00,000 | 20% | Rs.5,00,001 – Rs.7,50,000 | 10% |
| Rs.7,50,001 – Rs.10,00,000 | 15% | ||
| Above Rs.10,00,000 | 30% | Rs.10,00,001 – Rs.12,50,000 | 20% |
| Rs.12,50,001 – Rs.15,00,000 | 25% | ||
| Above Rs.15,00,000 | 30% | ||
For both the tax regime (Old and New)
Surcharge on Income Tax:
- @10%, where the total income exceeds Rs.50 lakhs up to Rs.1 crore.
- @15%, where the total income exceeds Rs.1 crore but below Rs.2 crores.
- @25%, where the total income exceeds Rs.2 crores but below Rs.5 crores.
- @37%, where the total income exceeds Rs.5 crores.
Health and Education Cess:
- Health and Education cess @4% on the income tax and applicable surcharge.
Rebate under Section 87A:
- No tax payable on total income up to Rs.5 lakh in both regimes.
Basic Exemption:
- Basic exemption under the new tax regime is 2.5 lakhs against 5 lakhs in the old tax regime.
Note: Some important exemptions and deductions like section 80C, 80CCD, 80D, 80TTB, HRA, etc will not be available under the new tax regime. However, the new tax regime is optional and you can continue with the old regime if you desire so.
What is the Financial Year (FY)?
The year in which you earn the income is known as the financial year. The financial year (FY) starts from April 1 and ends on March 31 of the following year.
What is an Assessment Year (AY)?
The assessment year is the year following the financial year in which the income is assessed. The assessment year (AY) starts from April 1 and ends on March 31, immediately succeeding a financial year (FY).
Income Tax Slabs for FY 2021-22 (AY 2022-23)
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