Rates of income tax for assessment year 2021-22

Rates of income tax for assessment year 2021-22

According to Income Tax Act 1961 an assesse total income taxed as per relevant assessment year income tax rates. According to Finance Act 2020 now there will be two income tax rates available from budget 2020

  1. Old Regime
  2. New Regime

If the individual or HUF opts to be taxed under old regime

 In the case of every Individual below 60 year or Hindu undivided family

Total Income Rate of Tax
Income up to Rs,2,50,000 Nil
Income Rs.2,50,001 to Rs, 5,00,000 5%
Income  Rs. 5,00,000 to Rs. 10,00,000 20%
Income above Rs.10,00,000 30%

 

In the case of every Individual who is of the age of 60 Years or more but less than 80 Years at any time during the previous year

Total Income Rate of Tax
Income Up to Rs.3,00,000 Nil
Income Rs.3,00,001 to Rs.5,00,000 5%
Income Rs.5,00,001 to Rs. 10,00,000 20%
Income above Rs.10,00,000 30%

 

In the case of very individual who is of the age of 80 years or more at any time during the previous year.

Total Income Rates of Tax
Income Up to Rs. 5,00,000 Nil
Income Rs. 5,00,001 to Rs.10,00,000 20%
Above Rs.10,00,000 30%

 

In the case of AOP/BOI (other than a co- operative society) whether incorporated or not or every artificial judicial person

Total Income Rate of Tax
Income up to Rs,2,50,000 Nil
Income Rs.2,50,001 to Rs, 5,00,000 5%
Income  Rs. 5,00,000 to Rs. 10,00,000 20%
Income above Rs.10,00,000 30%

 

 Surcharge

According to Income Tax Act 1961 and assesse whose income exceeding prescribed limit he is also liable to pay surcharge. Surcharge is a tax additional tax on assesse the amount of Income Tax shall be increased by surcharge for the purpose income tax calculated.

  1. Income exceeding Rs. 50,00,000 But not exceeding Rs. 1 Crore 10% of such Income-Tax
  2. If Income exceeding Rs1 Crore but not exceeding Rs.2 Crore 15% of such Income Tax
  3. If income exceeding Rs.2 Crore but not exceeding Rs.5 Crore 25% of such Income Tax.
  4. If Income exceeding Rs. 5 Crore 37% of such Income Tax.

 

 

Marginal relief: Marginal relief is a relief that reduce some tax amount. Marginal relief has provided in all above cases

 

Cess Health and Education Cess o Income Tax @ 4% on Income Tax (Inclusive of surcharge wherever applicable shall be levied.

 

 

New Regime

According to Finance Act 2020 Central Government give option to assesse for select an option from 1.Old Regime

  1. New Regime

Under new regime there is not allow various deduction under chapter VI A

Under new regime there is flat rate/slab of income tax for an individual or HUF mean there is no age different like below 60 years or above 60 years

Income tax Rates/Slab under New regime are given below

 Total Income Rate of Tax
Income Up to Rs. 2,50,000 Nil
Income  Rs.2,50,001 to Rs. 5,00,000 5%
Income Rs. 5,00,001 to Rs. 7,50,000 10%
Income Rs. 7,50,001 to Rs. 10,00.000 15%
Income Rs.10,00,001 to Rs.12,50,000 20%
Income rs.12,50,0001 to 15,00,000 25%
Above  Rs. 15,00,000 30%

 

 

In the case of AOP/BOI (other than a co- operative society) whether incorporated or not or every artificial judicial person

Total Income Rate of Tax
Income up to Rs,2,50,000 Nil
Income Rs.2,50,001 to Rs, 5,00,000 5%
Income  Rs. 5,00,000 to Rs. 10,00,000 20%
Income above Rs.10,00,000 30%

 

 

 Conclusion: According to Income Tax Act 1961 Finance Act 2020 first time give option to assesse for Income Tax rates/ slab.Total Income of an assesse tax according to selected option be an assesse. Under new Regime of Tax there is not allow various deduction under chapter VIA.  So that old regime is best for lower income.

 

 

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