For FY 2020-21, Salaried individuals, who have no business income, will have to choose between the existing and new tax regimes every financial year, as per their convenience. The same rule also applies to FY 2021-22 (AY 2022-23) without any changes.
The new income tax rates are lower compared to the old tax rate. However, anyone opting for the new tax regime will have to forego most of the deductions available under the old tax regime. For the taxpayer who opts for the old tax rule for FY 2020-21, income tax slabs remain the same as the previous financial year 2019-20. The taxpayer who for the old rule in FY 2020-21will be entitled to deductions and relief such as Leave Travel Allowance (LTA), House Rent Allowance (HRA), Conveyance, Daily expenses in the course of employment, Relocation allowance, Helper allowance, Children education allowance, Other special allowances [Section 10(14)], Standard deduction, Professional tax, Interest on housing loan (Section 24), Chapter VI-A deduction (80C,80D, 80E,80EEA,80EEB,80 TTA, 80TTB, etc.). The above list of exemptions and deductions will have to be given up by the taxpayer while choosing the new tax regime. The amount of rebate u/s 87A for FY 2020-21 (AY 2021-22) has been kept unchanged under both old and new income tax regime.
The tax slabs and tax rate under the OLD TAX REGIME (For the people who opt for the old scheme).
Born on after 01.04.1961
| Income Slabs | Tax & Surcharge |
| Income slab up to Rs.2.50 lakh | Nil |
| Income from 2.5 lakh to 5 lakh | 5%+Cess of 4% on tax liability ([Eligible for interest rebate up to Rs.12500 u/s 87A for taxable income of below Rs5lakh |
| Income above 5 lakh to Rs.10 lakh | Rs.12,500+20% on 5 lakh up to Rs.10 lakh+(Cess of 4% on tax liability) |
| Income more than 10 lakh | Rs.1,12,500+ 30% on above10 lakh +(Cess of 4% on tax liability) |
| Income from 50 lakh to Rs.1 crore | 13,12,500 + 30% on 50 lakh up to 1 crore+(Cess of 4% on tax liability and 10% surcharge) |
| Income from Rs.1 crore and above | 28,12,500 +30% on above 1 crore+ (Cess of 4% on tax liability and 15% surcharge) |
Senior Citizen Born on before 31.03.1961
| Income Slabs | Tax |
| Taxable Income up to Rs.3 lakh | Nil. |
| Income from 3 lakh to 5 lakh | 5% + Cess of 4% on tax liability [Eligible for interest rebate up to Rs.10000 u/s 87A for taxable income of below Rs5lakh] |
| Income from 5 lakh to Rs.10 lakh | Rs.10,000+20% on 5 lakh up to Rs.10 lakh+(Cess of 4% on tax liability) |
| Income from 10 lakh to Rs.50 lakh | Rs.1,10,000+ 30% on 10 lakh up to Rs.50 lakh+ (Cess of 4% on tax liability) |
| Income from 50 lakh to Rs.1 crore | 13,10,000 + 30% on 50 lakh up to 1 crore+ (Cess of 4% on tax liability and 10% surcharge)r |
| Income from Rs.1 crore and above | 28,10,000 +30% on above 1 crore+(Cess of 4% on tax liability and 15% surcharge) |
Super Senior Citizen (Born on before 31.03.1941)
| Income Slabs | Tax + Surcharge |
| Income slab up to Rs.5 lakh | Nil |
| Income from 5 lakh to Rs.10 lakh | 20%+ (Cess of 4% on tax liability) |
| Income from 10 lakh to Rs.50 lakh | Rs.1,00,000+ 30% on 10 lakh up to Rs.50 lakh+(Cess of 4% on tax liability) |
| Income from 50 lakh to Rs.1 crore | 13 lakh + 30% on 50 lakh up to 1 crore+ (Cess of 4% on tax liability and 10% surcharge) |
| Income from Rs.1 crore and above | 28 lakh +30% on above 1 crore+ (Cess of 4% on tax liability and 15% surcharge) |
Tax slabs and tax rates of the NEW TAX REGIME are as under.
Note: An additional 4% Health & education cess will be applicable to the tax amount calculated as above.
Individuals born after 01.04.1961
| Tax slabs | Tax and surcharge |
| Up to Rs.2.5 lakh | Nil |
| Income exceeding Rs 2.5 lakh up to Rs 5 lakh | 5%(Tax rebate of Rs 12,500 available under section 87A) |
| Income exceeding Rs5 lakh up to Rs7.5 lakh | 12500+10% on the income exceeding Rs.5 lakh |
| Income exceeding Rs7.5 lakh up to Rs10 lakh | 37500+15% on the income exceeding Rs.7.5 lakh up to Rs10 lakh |
| Income exceeding Rs10 lakh up to Rs12.5 lakh | 75000+20% on the income exceeding Rs10 lakh up to Rs12.5 lakh |
| Income exceeding Rs.12.5 lakh up to Rs15 lakh | 125000+25% on the income exceeding Rs12.5 lakh up to Rs15 lakh |
| Income exceeding Rs15 lakh | 187500+30% on the income exceeding Rs15 lakh |
Note: An additional 4% Health & education cess will be applicable to the tax amount calculated as above.
Senior citizen Born on or before 31.03.1961
| Tax slabs | Tax and surcharge |
| Up to Rs.3 lakh | Nil |
| Income exceeding Rs3 lakh up to Rs5 lakh | 5%(Tax rebate of Rs10000 available under section 87A) |
| Income exceeding Rs5 lakh up to Rs7.5 lakh | 10000+10% on the income exceeding Rs.5 lakh up to Rs7.5 lakh |
| Income exceeding Rs7.5 lakh up to Rs10 lakh | 35000+15% on the income exceeding Rs.7.5 lakh up to Rs10 lakh |
| Income exceeding Rs10 lakh up to Rs12.5 lakh | 72500+20% on the income exceeding Rs10 lakh up to Rs12.5 lakh |
| Income exceeding Rs.12.5 lakh up to Rs15 lakh | 122500+25% on the income exceeding Rs12.5 lakh up to Rs15 lakh |
| Income exceeding Rs15 lakh | 185000+30% on the income exceeding 15lakh |
Note: An additional 4% Health & education cess will be applicable to the tax amount calculated as above.
Super Senior citizen Born on or before 31.03.1941
| Tax slabs | Tax and surcharge |
| Up to Rs.5 lakh | Nil |
| Income exceeding Rs5 lakh up to Rs7.5 lakh | 10% on the income exceeding Rs.5 lakh up to Rs7.5 lakh |
| Income exceeding Rs7.5 lakh up to Rs10 lakh | 25000+15% on the income exceeding Rs.7.5 lakh up to Rs10 lakh |
| Income exceeding Rs10 lakh up to Rs12.5 lakh | 62500+20% on the income exceeding Rs10 lakh up to Rs12.5 lakh |
| Income exceeding Rs.12.5 lakh up to Rs15 lakh | 112500+25% on the income exceeding Rs12.5 lakh up to Rs15 lakh |
| Income exceeding Rs15 lakh | 175000+30% on the income exceeding 15lakh |
Note: An additional 4% Health & education cess will be applicable to the tax amount calculated as above.
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