Income Tax : It is directly calculate on your annual income. The latest income tax slabs for AY 2020-21 (FY 2019-20) in India is discussed here :
Now Income Tax Regime is Classified into 2 Categories
|Annual Income Tax Slab For AY 2020-21||Old Tax Regime||New Tax Regime|
|Up to Rs. 2.5 Lakh||Nil||Nil|
|Rs. 2.5 Lakh to 5 Lakh||5%||5%|
|Rs. 5 Lakh to 7.5 Lakh||20%||10%|
|Rs. 7.5 Lakh to 10 Lakh||20%||15%|
|Rs. 10 Lakh to 12.5 Lakh||30%||20%|
|Rs. 12.5 Lakh to 15Lakh||30%||25%|
|Above Rs. 15 Lakh||30%||30%|
Every individual taxpayers have rights to choose an option in between old tax regime and new tax regime. It is actually based on his annual income. Which options is best for an individual taxpayer, Firstly it is important to know that how much tax liability will be in both regime.
Individual taxpayers is further classified into 3 categories:
- Individuals – A Person Below the age of 60 years.
- Senior Citizens – A Person having age of 60 years and above but below the age of 80 years.
- Super Senior Citizens – A Person above the age of 80 years.
From 1st April 2020 every individual taxpayers have option to continue with old tax regime or opt for new tax regime. Both options having few benefits or exceptions, it is need to examine that which options is best for an individual taxpayers.
Here 2 major difference is define of both tax regime:
With the new tax regime if Individuals having taxable income of Rs. 5 lakh, That person will be eligible for the tax rebate up to Rs. 12,500/- under section 87A. On the other if we talks about old tax regime that person is eligible for the tax rebate up to Rs. 2,500/-.
In new tax regime individuals are not eligible to avail any kinds of deduction of under section 80C, 80D etc. and tax exemptions such as HRA, LTA etc. or in old tax regime individuals have option to avail all the benefits of deductions.
But in the new tax regime, an individual is eligible for only one deduction under section 80CCD (2). This section allows deduction on the employer’s contribution to the NPS Scheme.
Individual taxpayer’s can calculate his income tax by visit at https://www.incometaxindiaefiling.gov.in/Tax_Calculator/