In India, tax laws divide taxpayers into different groups as per their taxable income and levy income tax at different rates. These groups are called Income Tax Slabs. This type of taxation enables progressive and fair tax systems in the country. Such Income Tax Slabs tend to undergo a change during every budget. These slab rates are different for different categories of taxpayers. Hereunder this post, we will discuss Income Tax Slab Old Regime For FY 2021-22.
Income tax Slabs
In the budget 2020, Finance Minister Nirmala Sitharaman introduced the new income tax rates for individual and HUF taxpayers in India. under the new regime, the taxpayer has an option to choose either a new regime or stay in the old regime.
New Regime (Section 115BAC)- Here taxpayers can choose to pay tax at lower rates as per the new regime on the condition that they forgo certain permissible exemptions and deductions available under Income Tax, or
Old Regime (Existing Rate of Tax)- To continue to pay taxes under the existing tax rates. The assessee can avail of rebates and exemptions by staying in the old regime and paying tax at a higher rate.
Income Tax Slab Old Regime For FY 2021-22
Here we will discuss only Income Tax Slab Old Regime For FY 2021-22 for Individual and HUF assessee only.
Individual (Age below 60 years) and HUF Assessee Only
| Income Tax slab | Income Tax rate for individual (Age below 60 years) & HUF |
|---|---|
| upto Rs. 2,50,000 | NIL- No Tax |
| Rs. 2,50,000 to Rs. 5,00,000 | 5 % of total income exceeding Rs. 2,50,000 |
| Rs. 5,00,001 to Rs. 10,00,000 | Rs. 12,500 + 20% of total income exceeding Rs. 5,00,000 |
| Above Rs. 10,00,000 | Rs. 1,12,500 + 30% of total income exceeding Rs. 10,00,000 |
Also Read- Current Income Tax Slabs Rate As per New and Old Tax Regime and all other assessee
Income Tax Slab Old Regime For FY 2021-22: Senior Citizen (Age 60 years to 80 years)
| Income Tax slab | Rates |
|---|---|
| upto Rs. 3,00,000 | NIL- No Tax |
| Rs. 3,00,000 to Rs. 5,00,000 | 5 % of total income exceeding Rs. 3,00,000 |
| Rs. 5,00,001 to Rs. 10,00,000 | Rs. 10,000 + 20% of total income exceeding Rs. 5,00,000 |
| Above Rs. 10,00,000 | Rs. 1,10,000 + 30% of total income exceeding Rs. 10,00,000 |
Income Tax Slab Old Regime For FY 2021-22: Super Senior Citizen (Age above 80 years of age)
| Income Tax slab | Rates |
|---|---|
| upto Rs. 5,00,000 | NIL- No Tax |
| Rs. 5,00,001 to Rs. 10,00,000 | 20% of total income exceeding Rs. 5,00,000 |
| Above Rs. 10,00,000 | Rs. 1,00,000 + 30% of total income exceeding Rs. 10,00,000 |
The following points are also applicable for Income Tax Slab Old Regime For FY 2021-22–
Note 1:- An additional 4% health & education cess will be applicable to the tax amount calculates as above.
Note 2:- A tax rebate under section 87A is allowed to individual taxpayers (Age below 60 years) for a maximum amount of Rs. 12,500 if the total income is up to Rs. 5,00,000. The amount of rebate shall be 100% of the Income Tax or Rs. 12,500 whichever is less.
Note 3:- A tax rebate under section 87A is allowed to individual taxpayers (Age 60 or 60 + but below 80 years) for a maximum amount of Rs. 10,000 if the total income is up to Rs. 5,00,000. The amount of rebate shall be 100% of the Income Tax or Rs. 10,000 whichever is less.
Note 4:- The surcharge over the tax calculated will be charged (subject to marginal relief) as per the below table-
| Income Limit | Surcharge rate on amount of Income Tax |
|---|---|
| Net income exceed Rs. 50 Lakhs but does not exceed Rs. 1 Crore | 10% |
| Net Income exceed Rs. 1 Crore but does not exceed Rs. 2 Crore | 15% |
| Net Income exceed Rs. 2 Crore but does not exceed Rs. 5 Crore | 25% |
| Net Income exceed Rs. 5 Crore | 37% |
Exemption and Deduction in Income Tax Slab as per Old Tax Regime
Deductions mean removing certain investments and expenditures, the taxpayers make and then calculating the gross total income. Exemptions mean the taxpayer is free from the tax burden on certain incomes.
The new tax regime does not allow the taxpayers to avail themselves of certain deductions and exemptions whereas the old tax regime provides that the taxpayers can claim deductions and exemptions which are available to them. Under the old tax regime, there are 100+ exemptions and deductions but taxpayers do not benefit from all of them. Most of them complicate the direct tax system.
Here are some important deductions and exemptions that are available in the old tax regime of income tax are given here-
| Leave Travel Allowance |
| House Rent Allowance |
| Professional tax paid by a maximum of Rs. 2,500 |
| Standard Deduction of Rs. 50,000 that was available for salaried individual |
| Section 80TTA/80TTB- Interest From Saving Account Deposits |
| Entertainment allowance deductions and professional tax for government employee |
| The option to carry forward or unabsorbed depreciation of earlier years |
| Option of additional depreciation under section 32 (ii) (a) of the Income Tax Act |
| Tax relief on interest paid on home loan for self-occupied or vacant property u/s 24 |
| Deduction of Rs. 15,000 allowed from family pension under clause (iia) Section 57 |
| Tax-saving investment deductions under Chapter VI-A (80C,80D, 80E,80CCC, 80CCD, 80D, 80DD, 80DDB,, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc) (Except, deduction under Section 80CCD(2)—employers contribution to NPS, and Section 80JJA) and so on. These popular tax saving investment options include ELSS, NPS, PPF, tax break on insurance premium among others. |
A total of 50 exemptions are retained in the new tax regime that is allowable in old and new tax regimes as well. Some important exemptions are here-
| Income From Life Insurance |
| Agriculture Income |
| Standard Deduction on Rent |
| Retrenchment Compensation |
| Gratuity received from employer up to a maximum amount of Rs. 20 Lakh |
| Leave encashment on retirement |
| Interest and maturity amount of PPF of Sukanya Smriddhi Yojna |
| VRS proceeds up to Rs. 5 Lakh |
| Death cum retirement benefits |
| Money received for scholarships for education, etc. |
Frequently Asked Questions- FAQs
-
What is the tax slab for 2021?
The new tax for the year ending 31st March 2021 can be calculated using the following income tax slab rates applicable to individual taxpayers-
🎯 up to Rs. 2,50,000 NIL ▶️ No Tax
🎯 Rs. 2,50,001 to Rs. 5,00,000 ▶️ 5 % (Tax Rebate u/s 87a is available)
🎯 Rs. 5,00,001 to Rs. 7,50,000 ▶️ 10%
🎯 Rs. 7,50,001 to Rs. 10,00,000 ▶️ 15%
🎯 Rs. 10,00,001 to Rs. 12,50,000 ▶️ 20%
🎯 Rs. 12,50,001 to Rs. 15,00,000 ▶️ 25%
🎯 Above Rs. 15,00,000 ▶️ 30%
Note- The taxpayer opting for concessional rates in the New Tax Regime will have to forgo certain exemptions and deductions available in the existing old tax regime.
Note 2:- A tax rebate under section 87A is allowed to individual taxpayers for a maximum amount of Rs. 12,500 if the total income is up to Rs. 5,00,000 for FY 2020-21. The amount of rebate shall be 100% of the Income Tax or Rs. 12,500 whichever is less. (New Regime)
-
What is the Income Tax Slab For AY 2022-23?
As per the new tax regime for AY 2022-23 following income tax slab is applicable for all individuals and HUF assessee-
🎯 up to Rs. 2,50,000 NIL ▶️ No Tax
🎯 Rs. 2,50,001 to Rs. 5,00,000 ▶️ 5 % (Tax Rebate u/s 87a is available)
🎯 Rs. 5,00,001 to Rs. 7,50,000 ▶️ 10%
🎯 Rs. 7,50,001 to Rs. 10,00,000 ▶️ 15%
🎯 Rs. 10,00,001 to Rs. 12,50,000 ▶️ 20%
🎯 Rs. 12,50,001 to Rs. 15,00,000 ▶️ 25%
🎯 Above Rs. 15,00,000 ▶️ 30%
Note- The taxpayer opting for concessional rates in the New Tax Regime will have to forgo certain exemptions and deductions available in the existing old tax regime.
Note 2:- A tax rebate under section 87A is allowed to individual taxpayers for a maximum amount of Rs. 12,500 if the total income is up to Rs. 5,00,000 for AY 2022-23. The amount of rebate shall be 100% of the Income Tax or Rs. 12,500 whichever is less. (New Regime)
-
What is the standard deduction for AY 2021-22?
Standard deduction means a flat deduction to individuals earning a salary or pension income. It was introduced back in Budget 2018 in lieu of transport allowance and reimbursement of miscellaneous medical expenses. It is allowable from the “Income taxable under the head salary” The tax benefits can be claimed irrespective of the actual amount spent on ‘transport allowance’ and ‘medical allowance’.
For the assessment year 2021-22, the standard deduction applicable to salaries individual and pensioners is Rs. 50,000/-. But if you are choosing to pay tax under the new tax regime then you can not avail of the standard deduction -
How do I choose between old and new tax regime?
There is a lot of confusion, regarding which regime to pick. But selecting the right regime helps in optimizing taxes and wealth creation in the future. The taxpayer needs to evaluate both the regimes depending on the income, deductions, exemptions, etc., and select the right regime. But before opting or opt-out between the two following are important to read-
Salaried Person- For this purpose, a salaried person is free to opt-in or opt-out every year. He is only required to intimate his employer about his choice and the employer has to deduct TDS according to the employee choice.
Non-Salaried Person- A non-salaried person, has to make his choice at the time of filing his return. They are not required to intimate anyone during the year. However, a non-salaried taxpayer has no option to change his choice every year. It means once a non-salaried person opt-out of the new tax regime, they can not opt-in again for the new tax regime in the future.
***For tax planning purposes, a taxpayer needs to make a comparison between old and new tax regimes according to his estimated income of that financial year. Once the taxpayer chooses the right tax regime, the investment TDS or advance tax payable calculations are made accordingly.
Join our Social Community
Disclaimer: The information contained in the above article are solely for informational purpose after exercising due care. However, it does not constitute professional advice or a formal recommendation. The author does not own any responsibility for any loss or damage caused to any person, directly or indirectly, for any action taken on the basis of the above article.
Feedback/Suggestion- Hope you all find it useful, please give your valuable feedback & let us know if there is an error. Thanks in Advance