It will be applicable from the FY 2020-21(AY 2021-22). Income tax slabs 2020-21: Here are the new tax rates Under the new tax rates, there will be 10% tax levied for incomes between 5-7.5 lakh per annum, 15% for 7.5-10 lakh per annum bracket, 20% for 10-12.5 lakh per annum, 25% tax for income between 12.5 … New Optional income tax regime for Individuals and HUF has been proposed in the budget 2020. (i) Leave travel concession u/s section 10(5); (ii) House rent allowance u/s section 10(13A); (iii) Some of the allowance as contained in section 10(14); (iv) Allowances to MPs/MLAs as contained in section 10(17); (v) Allowance for the income of minor as contained in section 10(32); (vi) Exemption for SEZ unit contained in section 10AA; (vii) The standard deduction, a deduction for entertainment allowance and employment/professional tax as contained in section 16; (viii) Interest under section 24 in respect of self-occupied or vacant property referred to in sub-section (2) of section 23. ICICI Prudential Bluechip Fund Direct-Growth, Here are the latest income tax slabs and rates. For those individuals earning an income above Rs 50 lakh, a surcharge at the rate mentioned below is applicable. Daily Allowance to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments. Which income tax regime to adopt? This scheme provides an option to the tax-payers to pay tax at reduced rates subject to fulfillment of certain conditions. 70 exemptions were dropped from the Income Tax exemption list. He is the co-founder & CEO of Tax2Win.in. The person opting for the new scheme under section 115BAC shall not be entitled to the following exemptions/ deductions: Only following under section 10(14) are allowed to the Individual or HUF : For the FY 2020-21 (AY 2021-22) the taxpayer can choose amongst the old and new tax regime.The new optional tax regime has reduced income tax rate but without benefit of deductions and allowances and the existing tax slabs can be used with the benefits of deductions and exemptions. Budget 2020 has proposed to introduce new income tax slabs sans 70 deductions and tax exemptions. It will be applicable from the FY 2020-21(AY 2021-22). there will be no tax upto Rs 2.5lakhs for an individual/HUF. Professional Tax. A Person having business income can opt to pay tax as per the new tax slab structure if. There are many calculators available online to see which tax regime works best for your income level. Income Tax Form 60: For those who don't have Pan Card in India, Tax Saving Benefits for Home Buyers with & without Home Loan, Income Tax Regime for Individual/HUF in India, Taxable income after basic exemption limit, Applicable to Individual, HUF, AOP, BOI, AJP, Taxpayers who are willing to take benefit of allowances like HRA, LTA etc and have contributions to PPF, LIC, PF, Home Loan repayment, donations, medical policies, NPS and other eligible tax saving instruments etc. Those who do not have tax-saving investments / exemptions and are not willing to make the same anytime sooner. Will proposed new income tax slabs rates benefit senior citizens? For calculations, taxable income has been taken after all the deductions and allowances allowed (if any), Ans. (a) Transport Allowance granted to a divyang employee to meet the expenditure for the purpose of commuting between place of residence and place of duty. Tomorrow is different. A tax rebate of Rs 12500 under Sec 87A of Income Tax Act is available for individuals(only resident Individuals) whose taxable income is up to Rs 5 lakh even in the new tax regime. The basic exemption limit has still been kept unchanged i.e. This is what you should do to save on tax, 70 exemptions that you lose out in new tax regime, Click here to use our Income Tax Calculator, 5% of (Total income minus Rs 2,50,000) + 4% cess, Rs 12,500 + 20% of (Total income minus Rs 5,00,000) + 4% cess, Rs 1,12,500 + 30% of (Total income minus Rs 10,00,000) + 4% cess, 5% of (Total income minus Rs 3,00,000) + 4% cess, Rs 10,000 + 20% of (Total income minus Rs 5,00,000) + 4% cess, Rs 1,10,000 + 30% of (Total income minus Rs 10,00,000) + 4% cess, 20% of (Total income minus Rs 5,00,000) + 4% cess, Rs 1,00,000 + 30% of (Total income minus Rs 10,00,000) + 4% cess, Income above Rs 50 lakh but below Rs 1 crore, Income above Rs 1 crore but below Rs 2 crore, Income above Rs 2 crore but below 5 crore. Announcement of slabs, tax rates for various slabs, and the exemptions allowed happening during the presentation of the Annual Budget. Option is also available for persons having the business income subject to certain conditions. However, deduction under section 80CCD(2) (employer contribution on account of the employee in notified pension scheme) and section 80JJAA (for new employment) can be claimed. Option once exercised can be withdrawn only once. Before getting to know the income tax rates for particular slabs for the ongoing financial year, let us know the individual categories of taxpayers. This is based on various slabs as decided by the GOI. Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. *The above calculations are excluding cess. Let’s get a comparative study of the pros and cons of both tax slabs available to the taxpayer, Your tax outflow will be effected in a below-depicted manner under the new tax structure. The only deduction that is still available under the Section 80C benefits is the benefit under Sec 80CCD (2). Tax Exemptions Dropped under the New Tax Regime Income Tax Slab & Tax Rates for FY 2020-21(AY 2021-22) & FY 2019-20 (AY 2020-21), Section 234F: Penalty for Late Filing of Income Tax Return, Deductions under Chapter VI A of Income Tax Act for FY 2019-20(AY 2020-21), Income Tax Return (ITR) Filing 2019: How to File ITR Online India, Form 16: What is Form 16?
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