Income Tax in India (FY 20-21)
Income tax is a type of tax that governments impose on income generated by businesses and individuals within their jurisdiction.
Income tax is the source of revenue for Government. there are two types of taxes one is personal income tax and another one is corporate tax.
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.
As per Government of India One can opt for new regime as per above table in FY 20-21 or else he/her can stay with the old tax regime as per FY 19-20.
Important Things to Remember while Opting for the New Tax Regime
The options to be exercised on or before for every previous year where the individual or the HUF has no business income.
In case a taxpayer having a business income, an option once exercised cannot be taken back. Further, in case the taxpayer withdraws the option, it will be an irreversible option as he/she won’t be able to opt-in for the option again.
For the FY 2019-20, new surcharge rates have also been introduced on the income of the rich people. The table below shows how it applies.
Income tax is the source of revenue for Government. there are two types of taxes one is personal income tax and another one is corporate tax.
- Personal Income tax
Personal income tax is levied on an individuals wages, salaries and other types of income.
Business income taxes apply to corporations, partnerships, small businesses, and people who are self-employed.
- Corporate Income tax
Business income taxes apply to corporations, partnerships, small businesses, and people who are self-employed.In this article we will be focusing on only Personal Income Tax
Income Tax Slab
In India, where all the individuals earn an income in very large and diversified 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.
There are three age based categories are made
- Individuals within the age of 60 years or less, which includes residents as well as non-residents.
- Senior citizens with age above 60 years but below 80 years.
- Super senior citizens with age above 80 years.
Income tax slab for individual below 60 years of age for FY 20-21 & FY 19-20 is shown in below table
If any individual opt a new tax regime then he/her can not claim any income tax exemptions. like
- Leave Travel Allowance (LTA)
- House Rent Allowance
- Conveyance
- Daily expenses in the course of employment
- Relocation allowance
- Helper allowance
- Children education allowance
- Other special allowance [Section 10(14)]
- Standard deduction
- Professional tax
- Housing loan interest (Section 24)
- Deduction under Chapter VI-A (80C, 80D, 80E, and so on) (Except section 80CCD(2) – NPS contribution by the employer and 80JJA)
Important Things to Remember while Opting for the New Tax Regime
The options to be exercised on or before for every previous year where the individual or the HUF has no business income.
In case a taxpayer having a business income, an option once exercised cannot be taken back. Further, in case the taxpayer withdraws the option, it will be an irreversible option as he/she won’t be able to opt-in for the option again.
Income tax slab for individual above 60 years and below 80 years of age for FY 20-21 is shown in below table
For the FY 2019-20, new surcharge rates have also been introduced on the income of the rich people. The table below shows how it applies.
Nice Article
ReplyDeleteVery Good..keep going 👍👏
ReplyDeleteNice
ReplyDeleteNice
ReplyDeleteThe best article to get the idea of tax slabs.
ReplyDeleteArticle provide deep indepth knowledge..
ReplyDelete