Income tax in India is a tax paid by individuals or entities depending on the level of earnings or gains during a financial year. The earnings may be both actual and notional. The Government of India decides the rate of income tax as well as income tax slabs on which individuals are taxed. Those under higher income slabs are taxed at higher rates. The taxable income slabs are changed from time to time, keeping in mind the price levels. Sometimes, the government also provides income tax rebates, which benefit people in the lower-income group. To collect long-term funds, the government also provides income tax incentives. The amount invested in tax-saving schemes is deducted from gross income, which reduces the amount of taxable income and benefits the taxpayer.
In case the actual tax payable is less than either the amount of advance tax paid or the amount of TDS for the corresponding year, the assessee may claim the excess tax back by filing the appropriate ITR Form. Once the ITR is verified, the income tax refund is processed if the Income Tax Department finds that the claim is genuine.
Who is liable to pay income tax
What benefit you will get after filing of Income Tax Return –
Here are the summarised new Income Tax Slab for F.Y 2020-21 ( A Y 2021-22) in India for Individual:-
From FY 2020-21, an individual taxpayer will have an option to choose between existing and new tax regime. In order to know which tax regime is beneficial for an individual, it is important to know how much will be the tax liability in both regimes, below are the tax slab rate for calculation the income tax ;-
Income Tax rate as per New regime
Income Tax Slab |
Tax Rate |
Up to Rs 2.5 lakh |
NIL |
Rs 2.5 lakh to Rs 5 lakh |
5% (Tax rebate of Rs 12,500 available under section 87A) 87A) |
Rs 5 lakh to Rs 7.5 lakh |
10% |
Rs 7.5 lakh to Rs 10 lakh |
15% |
Rs 10 lakh to Rs 12.5 lakh |
20% |
Rs 12.5 lakh to Rs 15 lakh |
25% |
Rs 15 lakh and above |
30% |
In case of an Individual (resident or non-resident) or HUF or Association of Person or Body of Individual or any other artificial juridical person
Taxable Income |
Tax Rate |
|---|---|
Up to Rs. 2,50,000 |
Nil |
Rs. 2,50,000 to Rs 5,00,000 |
5% |
Rs. 5,00,000 to Rs. 10,00,000 |
20% |
Above Rs. 10,00,000 |
30% |
Less: Rebate under Section 87A [see Note]
Add: Surcharge and Health & Education Cess [see Note]
In case of a resident senior citizen (who is 60 years or more at any time during the previous year but less than 80 years on the last day of the previous year)
Taxable Income |
Tax Rate |
|---|---|
Up to Rs. 3,00,000 |
Nil |
Rs. 3,00,000 to Rs 5,00,000 |
5% |
Rs. 5,00,000 to Rs. 10,00,000 |
20% |
Above Rs. 10,00,000 |
30% |
Less: Rebate under Section 87A [see Note]
Add: Surcharge and Health & Education Cess [see Note]
In case of a resident super senior citizen (who is 80 years or more at any time during the previous year)
Taxable Income |
Tax Rate |
|---|---|
Up to Rs. 5,00,000 |
Nil |
Rs. 5,00,000 to Rs. 10,00,000 |
20% |
Above Rs. 10,00,000 |
30% |
|
Add: Surcharge and Health & Education Cess
Note:- Rebate under Section 87A: The rebate is available to a resident individual if his total income does not exceed Rs. 5,00,000. The amount of rebate shall be 100% of income-tax or Rs. 12,500, whichever is less.
Note:- Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of 4% of such income-tax and surcharge.
