What Are The Old And New Income Tax Slabs For FY2020-21

Written by: Dinesh J Shah and Associates

An Individual in India pays income tax according to a slab scheme. Specific tax rates are recommended for different levels of income in a slab scheme. It means that when a taxpayer’s income rises, their tax rate increases as well. This method of taxation allows a nation to have progressive and equitable tax structures.

In each budget, specific income tax slabs are likely to adjust. Different slab rate are determined by different types of taxpayers. Individual taxpayers are divided into three groups by the IRS:

• Individuals (under the age of 60), both local and outsiders,
• Local Senior Individuals age 60 to 80 years,
• Local Super Senior Individuals age above 80 years.

This financial year, we have a choice to either opt for old or the new tax regime.

Old Tax Regime

1) For individuals below 60 years of age: Individuals, HUFs under 60 years of age and NRIs are eligible for an income tax exemption of up to Rs.2, 50,000 in FY 2018-19. On top of that, a 4% health and education cess is applied to the tax number.

2) For individuals below 60 years of age: Individuals, HUFs under 60 years of age, and NRIs are eligible for an income tax exemption of up to Rs.2,50,000 in FY 2018-19. On top of that, a 4% health and education cess is applied to the tax number.

3) For individuals aged 80 years or more: Taxpayers above 80 years of age come under Senior Individuals under the Income Tax Act, 1961. They must pay the taxes per the income tax slab FY 2020-21 and AY 2021-22.

New Tax Regime

The Finance minister of government-initiated new taxation authorities for individual and HUF taxpayers under Section 115 BAC of the Income Tax Act, 1961. Any individual is allowed to opt for the concessional tax rates, but he cannot avail of 70 deductions in the new tax regime of India.