Here are the latest income tax slabs and rates

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STORY OUTLINE
The basic exemption limit for an individual depends on
his/her age as well as his/her residential status.

Budget 2020 has proposed to introduce new income tax

slabs sans 70 deductions and tax exemptions. However,
individuals having net taxable income up to Rs 5 lakh will
be eligible for rebate up to Rs 12, 500 under both the tax
regimes.

The basic tax exemption limit for an individual depends on their age and residential status.

The Union Budget 2020 introduced

a new income tax regime with
reduced tax rates for those willing to
forego 70 tax-exemptions and deductions under it. This new tax system
has been made optional and continues to co-exist with the old one that
comprises of three tax rates and various tax exemptions and deductions
available to a taxpayer. The new income tax slabs and rates have come
into effect from April 1, 2020 for FY 2020-21.

Income tax rates and slabs under new tax regime for FY 2020-21
Total income (Rs) Income tax rate

Up to 2.5 lakh Nil

From 2,50,001 to Rs 5,00,000 5 percent

From 5,00,001 to Rs 7,50,000  10 percent

From 7,50,001 to 10,00,000 15 percent

From 10,00,001 to Rs 12,50,000 20 percent

From 12,50,001 to 15,00,000 25 percent

Above 15,00,000 30 percent

Individuals with a net taxable income of up to Rs 5 lakh in a financial year

will be able to avail tax rebate of Rs 12,500 under section 87A in both the
existing and new tax regimes. Effectively, this means that individual
taxpayers with net taxable income of up to Rs 5 lakh will continue to pay
zero tax in both the tax regimes.

However, individuals who have opted for the new tax regime would not
be able to avail common tax breaks such as deductions under section
80C for maximum of Rs 1.5 lakh by investing in specified instruments,
section 80D for medical insurance paid, house rent allowance, leave
travel allowance etc.

Also Read: 70 exemptions that you lose out in new tax regime
On the other hand, individuals who have opted for the existing tax regime
will continue to pay tax on their income at the same rates in FY 2020-21
as they did in FY 2019-20. 

Abhishek Soni, CEO, Tax2win.in, an ITR filing website says, "If senior
citizens or super senior citizens are opting for new tax regime then the
benefit of higher exemption limit will not be available i.e. limit of higher
exemption of Rs 3 lakh in case of senior citizens and Rs 5 lakh in case of
super senior citizens will not be available under the new optional regime.
Therefore, under the new tax regime, basic exemption limit will remain
Rs 2.5 lakh for all taxpayers."

Under the existing tax regime, the basic tax exemption limit for an
individual depends on their age and residential status. According to their
age, resident individual taxpayers are divided into three categories:

1. Resident individuals below the age of 60 years

2. Resident senior citizens above 60 years but below 80 years
3. Resident super senior citizens above the age of 80 years

Here is a look at the latest income tax slabs for FY 2018-19, FY 2019-20
and FY 2020-21:

Income tax slabs for resident individuals below 60 years of age for
FY 2019-20, 2020-21

Taxable income slabs Income tax rates and cess

Up to Rs 2.5 lakh Nil

Rs 2,50,001 to Rs 5,00,000 5% of (Total income minus Rs 2,50,000) + 4% cess

Rs 5,00,001 to Rs Rs 12,500 + 20% of (Total income minus Rs 5,00,000) + 4% cess

10,00,000

Rs 10,00,001 and above Rs 1,12,500 + 30% of (Total income minus Rs 10,00,000) + 4%

cess

Income tax slabs for resident individual between 60 and 80 years of

age (Senior Citizen) for FY 2019-20, 2020-21

Taxable income slabs Income tax rates and cess

Up to Rs 3 lakh Nil

Rs 3,00,001 to Rs 5,00,000 5% of (Total income minus Rs 3,00,000) + 4% cess

Rs 5,00,001 to Rs Rs 10,000 + 20% of (Total income minus Rs 5,00,000) + 4% cess

10,00,000

Rs 10,00,001 and above Rs 1,10,000 + 30% of (Total income minus Rs 10,00,000) + 4%

cess

Income tax slabs for resident individual above 80 years of age

(Super Senior Citizen) FY 2019-20, 2020-21

Taxable income slabs Income tax rates and cess

Up to Rs 5 lakh Nil

Rs 5,00,001 to Rs 20% of (Total income minus Rs 5,00,000) + 4% cess

10,00,000

Rs 10,00,001 and above Rs 1,00,000 + 30% of (Total income minus Rs 10,00,000) + 4%

cess

As per the Budget 2019 announcement, no changes in the income tax

slabs and rates have been made. A rebate of Rs 12,500 will be available
for all taxpayers with taxable income up to Rs 5 lakh. This rebate will be
available under Section 87A of the Income Tax Act from FY 2019-20
onwards. Also, standard deduction for financial year 2019-20 would be
Rs 50,000.

For the FY 2019-20, new surcharge rates have been introduced for the
super rich. 

Surcharges to be levied for FY 2019-20 and FY 2020-21:

Taxable Income Surcharge (%)
Income above Rs 50 lakh but below Rs 1 10
crore
Income above Rs 1 crore but below Rs 2 15
crore
Income above Rs 2 crore but below 5 crore 25
Income above Rs 5 crore 37

For non-resident individuals (NRI), the basic exemption limit is of Rs 2.5

lakh in a financial year irrespective of their age. Surcharge as mentioned
in the table above will be levied on the taxable income. However, rules
regiarding determining NRI criteria has changed from April 1, 2020.
Click here to read all about it.

In Budget 2018, cess on income tax was increased to 4 per cent for FY
2018-19 onwards from 3 per cent for FY 2017-18 across the board for
taxpayers. Due to the hike in cess, the tax liability for the highest slab
(assuming an income of Rs 15 lakh) has increased by Rs 2,625. In the
middle income tax slab, the tax outgo increases by Rs 1,125, and there is
a nominal increase in the tax liability of Rs 125 for lowest income tax
slab.

Here's how much your income tax liability will be:

Click here to use our Income Tax Calculator

As per the current income tax slabs, taxation of income of resident

individuals below 60 years is as follows: Income up to Rs 2.5 lakh is
exempt from tax, 5 per cent tax on income between Rs 250,001 to Rs 5
lakh; 20 per cent tax on income between Rs 500,001 and Rs 10 lakh;
and 30 per cent tax on income above Rs 10 lakh.

For senior citizens (aged 60 years or above but less than 80 years),
income up to Rs 3 lakh is exempt from tax. Income from Rs 300,001 to
Rs 5 lakh is taxed at 5 per cent, from Rs 500,001 to Rs 10 lakh at 20 per
cent and above Rs 10 lakh at 30 per cent.

For super senior citizens, aged 80 years and above, income up to Rs 5

lakh is exempt from tax. Income from Rs 500,001 to Rs 10 lakh is taxed
at 20 per cent and above Rs 10 lakh is taxed at 30 per cent.

Income tax slabs for FY 2017-18

After taking the deductions under Section 80 (C) to 80 (U), the tax is
payable after adding the cess and surcharge, if applicable. 

How is tax liability calculated?

The tax liability is calculated on the income arrived at after availing all
the deductions and other tax-exemptions available to the individual.

How to calculate total income?

To calculate your total income, you must add the income received from
various sources such as salary, pension, interest received from fixed
deposit, recurring deposit, savings account and so on.

How do I know my tax payment details?

Once the tax is deposited by you or any other individual has deducted
tax and deposited with the government on your behalf, then total amount
of tax deposited against your PAN will be reflected in Form 26AS. You
can download the statement from your account on the income tax e-filing
website.
How can I pay taxes?
A taxpayer can pay tax offline or online. For offline method, an individual
is required to visit the bank branch and pay the tax due along with duly
filled challan. Another way is paying taxes online using Net banking
facility of any of the authorised banks.