ITR Income Tax Slabs Calculation IT Returns Rates in India

According to ACT  1961, One should pay tax from his/her income who comes under the taxpayer. As we know our finance minister announced changes in tax slabs and tax rates for the financial year (2020-2021) so today we are going to understand that changes in a very clear way. So let’s start

INCOME TAX SLABS –

Before understanding the new tax regime let me clear your old tax regime so that you can point changes.

OLD TAX REGIME

INCOME TAX SLAB            TAX RATE
       2.5 LAKH              NIL
     2.5-5 LAKH              5%
     5-10 LAKH             20%
  ABOVE 10 LAKH             30%

NEW TAX REGIME

INCOME TAX SLAB         TAX RATES
          2.5 LAKH          NIL
      2.5-5 LAKH          5%
      5-7-5 LAKH          10%
     7.5-10 LAKH          15%
     10-12.5 LAKH          20%
    12.5-15 LAKH          25%
ABOVE 15 LAKH           30%

 

Now from the above old tax regime and new tax regime, One can say that a new tax regime is beneficial for us, but in the old tax regime, we have deductions like.

  • Deduction up to 50000 as the standard deduction.
  • Deduction up to 1.5lakh under sections.
  • Deduction on interest rates on educational loans.

These deductions has not given in new tax slabs. After knowing that in the new tax regime you don’t have many deductions as in old. You may have confusion for choosing which one is beneficial for you as the tax department has given the option to choose between the new and old tax slab rates.

Example of the Old Tax Slab Calculation –

Let assume Ram has an income of Rs.7 lakh in that 7 lakh he can deduct the Rs.50000 as standard deduction and 1.5lakh which comes under section 80C, So RAM is with a net taxable income of 5 lakh for that 5 lakh RAM can rebate under section 87A it means he doesn’t have to pay tax for it.

Details about the tax slabs for the different income sources for 2019-2020 Assessment year slab rates details-

The resident and Non-resident Indians who are NRIs are having the same tax rates and tax slabs. Below information for the resident and non- resident Indians who are having less than 60 years of age. These slab rates are for the annual year of 2019-2020.

  • If the income is up to Rs.2,50,000/- tax rate is Nil.
  • If your income is up to Rs.2,50,000/- to Rs.5,00,000/- the tax rate is 5% on the income which is Rs.25000/-
  • If the income is from Rs.5,00,000/- to Rs.10,00,000/- the tax rate is 20% of the income which can be max Rs.1 lakh + Rs.25000/-
  • If the income is over Rs.10,00,000/- the tax must be paid 30% which can be Rs.10 lakh + Rs.1 lakh + along with Rs.25000.

HUFs Tax Slabs-

HUF is called a Hindu Undivided Family. For taxation purposes, the HUS has a legal identity. Here are the slab rates which are for the annual year of 2019-2020.

  • If the income is up to Rs.2,50,000/- tax rate is Nil.
  • If your income is up to Rs.2,50,000/- to Rs.5,00,000/- the tax rate is 5% on the income.
  • If the income is from Rs.5,00,000/- to Rs.10,00,000/- the tax rate is 20% of the income.
  • If the income is over Rs.10,00,000/- the tax must be paid 30%.

Here are some of the important factors on which the tax rates are applicable-

  • The tax rate.
  • Income tax charges.
  • Gross income.
  • Assessment year
  • Individuals income
  • The individual’s residential status.
  • Income is not taxable until the maximum amount limits.

The above slab rates are applicable only for the below-given applicants-

  • A firm
  • Any local authority
  • Companies
  • HUF Hindu Undivided Family
  • Any individual who is having a regular income source.
  • AOP/BOI even if they are incorporated or not net to pay the tax.

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Tax slabs for the Individuals, Associations of persons, seniors and also for Other Artificial Judicial persons, doctors, and freelancers-

According to the Income-tax Act 1961, If any BOI Body of Individuals, AOP Associations of persons, and also one of the artificial judicial persons who are planning to make profits are liable to pay the tax. Even the seniors whose age is more than 60 years and less than 80 years who are making profits by earning are also liable to pay the taxes as per the Act. Below are the details about the tax slabs for the different incomes.

  • If the income is up to Rs.2,50,000/- tax rate is Nil.
  • If your income is up to Rs.2,50,000/- to Rs.5,00,000/- the tax rate is 5% on the income which is Rs.25000/-
  • If the income is from Rs.5,00,000/- to Rs.10,00,000/- the tax rate is 20% of the income which can be max Rs.1 lakh + Rs.25000/-
  • If the income is over Rs.10,00,000/- the tax must be paid 30% which can be Rs.10 lakh + Rs.1 lakh + along with Rs.25000.

Tax Slabs for Super Senior Citizens

During the applicable financial year, the senior citizen IT slab who are aged 80 years and more are defined as super senior citizens who make gains and profits need to pay the tax as per the taxation rules. Here are the tax slabs to be paid by the super senior citizens for their incomes.

  • If the Senior citizen income is up to Rs.2,50,000/- tax rate is Nil.
  • If your income is up to Rs.2,50,000/- to Rs.5,00,000/- the tax rate is 5% on the income which is Rs.25000/-
  • If the income is from Rs.5,00,000/- to Rs.10,00,000/- the tax rate is 20% of the income which can be max Rs.1 lakh + Rs.25000/-

IT Slabs for Domestic Companies-

  1. A Flat rate of 30% of the tax rate is applicable for any of the Domestic entity companies.
  2. The company has to pay a flat rate of 25% if in the previous year the gross profit of the company does not cross more than Rs.250 crores.

Societies-

The Rural/ Semi-Urban and urban societies which do not include Agricultural societies and SHG Self Health Group need to pay the applicable tax rates as follows-

  • If the income is up to Rs.10,000/- the tax rate is 10%.
  • The income is up to Rs.10,000/- to Rs.20,000/- the tax rate is 20%.
  • If the income is over Rs.20,000/- the tax rate is 30%.