Tax Slab Rate for AY 2021-22

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  • Income Tax Slabs

Income tax payment for individuals and corporate entities is a mandatory requirement as per the Income Tax Act, 1961 if their annual income is above the minimum exemption limit. However, taxpayers can also avail tax benefits under various sections of the Act. To reap these benefits, one must understand the income tax slab and applicable rates.

  • What is the Income Tax Slab?

In India, where individuals earn an income within a diverse range, levying a tax on all individuals at a specific rate would not be a fair policy. The Act, therefore, segregates income ranges and levies tax at different rates as per the segregation. These groups are thus known as tax slabs.

The slabs also vary based on age if the taxpayer is an individual and as per the classification of entities. Income tax slabs are amended and revised each year during the Central Government’s Budget Session. These amendments and revisions once proposed are approved by the Parliament and implemented as law.

Various Tax rates applicable are as follows:-

Income Tax Slab Rate for AY 2021-22 for Individuals opting for old tax regime

Individual (resident or non-resident), who is of the age of fewer than 60 years on the last day of the relevant previous year:

Net income rangeIncome-Tax rate
Up to Rs. 2,50,000Nil
Rs. 2,50,000- Rs. 5,00,0005%
Rs. 5,00,000- Rs. 10,00,00020%
Above Rs. 10,00,00030%

Resident senior citizen, i.e., every individual, being a resident in India, who is of the age of 60 years or more but less than 80 years at any time during the previous year:

Net income rangeIncome-Tax rate
Up to Rs. 3,00,000Nil
Rs. 3,00,000 – Rs. 5,00,0005%
Rs. 5,00,000- Rs. 10,00,00020%
Above Rs. 10,00,00030%

Resident super senior citizen, i.e., every individual, being a resident in India, who is of the age of 80 years or more at any time during the previous year:

 Net income rangeIncome-Tax rate
Up to Rs. 5,00,000Nil
Rs. 5,00,000- Rs. 10,00,00020%
Above Rs. 10,00,00030%
  1. Plus: –
  2. Surcharge: – 
  • 10% of income tax where total income exceeds Rs. 50,00,000.
  • 15% of income tax where total income exceeds Rs. 1,00,00,000. 25% of income tax where total income exceeds Rs. 2,00,00,000
  • 37% of income tax where total income exceeds Rs. 5,00,00,000.

3.  Health and Education cess: – 4% of income tax and surcharge.

Note: – A resident individual is entitled for rebate under section 87A 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.

Income Tax Rates For HUF/AOP/BOI/Any other Artificial Juridical Person under the old tax regime

Net income rangeIncome-Tax rate
Up to Rs. 2,50,000Nil
Rs. 2,50,000- Rs. 5,00,0005%
Rs. 5,00,000- Rs. 10,00,00020%
Above Rs. 10,00,00030%
  1. Plus: – 
  2. Surcharge: –
  • 10% of income tax where total income exceeds Rs. 50,00,000.
  •  15% of income tax where total income exceeds Rs. 1,00,00,000.
  •   25% of income tax where total income exceeds Rs. 2,00,00,000.
  •    37% of income tax where total income exceeds Rs. 5,00,00,000.

3. Health and Education cess: – 4% of income tax and surcharge.

Income tax applicable to Individuals and HUF under new optional tax regime (Section 115BAC)

A new tax regime for Individual and HUF has been proposed by the Finance Bill, 2020 to tax the income of such assessees at lower tax rates if they agree to forego prescribed deductions and exemptions under the Income Tax Act. Special provision for calculating income of assessees opting for this section is prescribed under the said section.

Net income rangeAny Individual/ HUF
Up to Rs. 2,50,000Nil
From Rs 2,50,001 to Rs 5,00,0005%
From Rs 5,00,001 to Rs 7,50,00010%
From Rs 7,50,001 to Rs 10,00,00015%
From Rs 10,00,001 to Rs 12,50,00020%
From Rs 12,50,001 to Rs 15,00,00025%
Above Rs. 15,00,00030%
  1. Plus: – 
  2. Surcharge: –
  • 10% of income tax where total income exceeds Rs. 50,00,000.
  • 15% of income tax where total income exceeds Rs. 1,00,00,000.
  • 25% of income tax where total income exceeds Rs. 2,00,00,000.
  • 37% of income tax where total income exceeds Rs. 5,00,00,000.

3. Health and Education cess: – 4% of income tax and surcharge.

Income Tax Rate for Partnership Firm:

A partnership firm (including LLP) is taxable at 30%.

  • Plus:
  • Surcharge:- 12% of tax where total income exceeds Rs. 1 crore.
  • Health and Education cess: 4% of income tax plus surcharge.

Tax rates for domestic companies:

ParticularsTax rates
Company opting for section 115BA*25%
Company having turnover or gross receipt of up to Rs. 400 crore in the previous year 2017-18*30%
Company opting for section 115BAA**22%
Company opting for section 115BAB**15%
Any other company*30%
MAT***15%

Tax rates for foreign companies:

The tax rate for foreign company is 40%. Plus: –  Surcharge:-

CompanyNet income is between Rs. 1Cr. – 10 Cr.Net income exceeds Rs. 10Cr.
Domestic company7%12%
Foreign company2%5%

Health and Education cess: 4% of income tax plus surcharge.

Income Tax Slab Rate for Co-operative Society:

Income tax rates under the old regime: –

Net income rangeIncome-Tax rate
Up to Rs. 10,00010%
Rs. 10,000 to Rs. 20,00020%
Above Rs. 20,00030%
  • Plus:
  • Surcharge:- 12% of tax where total income exceeds Rs. 1 crore.
  • Health and Education cess: 4% of income tax plus surcharge.

Income tax applicable to co-operative society under new optional tax regime (Section 115BAC): –

Income of a co-operative society under the new regime is taxable at flat rate of 22% provided it forgoes specified deductions and exemptions and computes its income in accordance with the provisions of the new inserted section.

  • Plus:
  • Surcharge:- 10% of income tax.
  • Health and Education cess: 4% of income tax plus surcharge.
  •  Income Tax Slab Rate for Local Authority:

A local authority is taxable at 30%.

  • Plus:
  • Surcharge:- 12% of tax where total income exceeds Rs. 1 crore.
  • Health and Education cess: 4% of income tax plus surcharge.

Income tax return filing is mandatory if the income falls under taxable slabs. So, make sure to keep a check on the due dates and file your income tax returns to avoid penalty.

Disclaimer: This information has been taken from https://www.incometaxindia.gov.in/news/finance-act-2020.pdf. Tax laws are subject to amendments made thereto from time to time. Please consult a professional tax advisor before acting on the above.

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