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Indian Income-tax levies tax on individual taxpayers based on a slab system. A slab system means different tax rates are prescribed for different ranges of income. Income tax has classified three categories of “individual “taxpayers such as:

  • Individuals (aged less than of 60 years)
  • Senior citizens (60 to 80 years of age)
  • Super senior citizens (aged more than 80 years)

Income Tax Slab Rates for FY 2021-22 (AY 2022-23)

NOTE:

  • Please note that the tax rates in the New tax regime is the same for all categories of Individuals, i.e Individuals & HUF upto 60 years of age, Senior citizens above 60 years upto 80 years, and Super senior citizens above 80 years. Hence no increased basic exemption limit benefit will be available to senior and super senior citizens in the New Tax regime.
  • Surcharge applicable as per tax rates below in all categories mentioned above:
  • 10% of Income tax if total income > Rs.50 lakh
  • 15% of Income tax if total income > Rs.1 crore
  • 25% of Income tax if total income > Rs.2 crore
  • 37% of Income tax if total income > Rs.5 crore

Income tax slab rate for Old Tax regime – FY 2020-21 (AY 2021-22)

Income tax slabs for individual aged below 60 years & HUF

NOTE:

  • An additional 4% Health & education cess will be applicable on the tax amount calculated as above.
  • Surcharge:
  • 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.
  • 15% of income tax, where the total income exceeds Rs.1 crore.

Let’s understand this better with Examples

CASE 1:

Imagine the annual salary of Mr.XYZ 25-year old individual, is ₹5 Lakhs. After the standard deduction and the income tax deductions under Section 80C (PPF & NPS) and Section 10 (13A) (Exemption on HRA) of the Income Tax Act, 1961, his taxable income stands to be ₹2.78 Lakhs. As the income over ₹2.5 Lakhs is taxed at 5%, his total due tax comes to ₹1,400. As per Section 87A of the Income Tax Act, 1961, Mr.XYZ gets full tax rebate his annual income is up to ₹5 Lakhs.

CASE 2:

Assume the yearly salary of Mrs.ABC, a 35-year old individual, is ₹10 Lakhs. After the deductions under Section 80C , Section 80D and Section 10 (13A) and the standard deductions, her taxable income stands to be ₹7 Lakhs. As income over ₹5 Lakhs is taxed at ₹12,500 + 20%, his total due tax comes to ₹52,500. Mrs.ABC will also be charged 4% Health & Education Cess which increases the tax amount to ₹54,600.

CASE 3:

Similarly, in another instance, the annual salary of Mrs.UVW , a 40-year old

individual, is ₹15 Lakhs after the standard deduction and the deductions under Section 80C and Section 10 (13A) her taxable income comes to be ₹11.5 Lakhs as income over ₹10 Lakhs is taxed at ₹1,12,500 + 30%, her total due tax comes to ₹1,57,500. After adding the 4% Health & Education Cess, Mrs.UVW will have to pay the tax amount of ₹1,63,800.

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