Income Tax Slab Rates for FY 2021-22 l New Tax Regime

Direct Taxes are charged on the income earned by an individual or a corporate entity on any profit earned or revenue generated. This tax is commonly named as Income Tax.In India, the income earned is categorized into different slabs.Tax is charged at different rates for different income levels falling under different tax slabs.

These rates vary for different taxpayers; the tax rates for the individuals are different from the tax rates for the corporate entities.Here in this Article we will be discuss in detail about the Income Tax Slab Rates for both the individuals as well as the companies applicable for the FY 2020 – 21

Table of Contents

Income Tax Slab Rates for the for FY 2020 – 21 & A.Y. 2021-22 for Individuals of different age groups

There are three categories of individual taxpayers:

Individuals (below the age of 60 years), which includes residents as well as non-residents.
Senior citizens (60 years and above but below the age of 80 years)
Resident super senior citizens (above 80 years of age)

Taxpayers have an OPTION to choose either:

To pay taxes under the existing tax rates i.e. old regime. The assessee can avail rebates and exemptions by opting old regime and pay tax at the existing higher rate. Or
To pay income tax at lower rates as per New Tax regime on the condition that they forgo certain permissible exemptions and deductions available under income tax.

Income tax slab rate for Old Tax regime – FY 2020-21 (AY 2021-22)

Income Tax Slab Rates for Individuals below the age of 60 years

Income Tax Slab	Tax Rate for Individual
Up to Rs. 2,50,000*	Nil
Rs. 2,50,001 to Rs. 5,00,000	5% of total income exceeding Rs. 2,50,000
Rs. 5,00,001 to Rs. 10,00,000	Rs. 12,500 + 20% of total income exceeding Rs. 5,00,000
Above Rs. 10,00,000	Rs. 1,12,500 + 30% of total income exceeding Rs. 10,00,000

Income Tax Slab Rates for Senior Citizens (Above 60 Years and below 80 Years).

Income Tax Slab	Tax Rate for Senior Citizen
Up to Rs. 3,00,000*	Nil
Rs. 3,00,001 to Rs. 5,00,000	5% of total income exceeding ₹3,00,000
Rs. 5,00,001 to Rs. 10,00,000	Rs. 10,000 + 20% of total income exceeding Rs. 5,00,000
Above Rs. 10,00,000	Rs. 1,10,000 + 30% of total income exceeding Rs. 10,00,000

Income Tax Slab Rates for Super Senior Citizens (above 80 Years)

Income Tax Slab	Tax Rate for Super Senior Citizens
Up to Rs. 5,00,000	Nil
Rs. 5,00,000 – Rs. 10,00,000	20% of total exceeding ₹ 5,00,000
Above Rs. 10,00,000	Rs. 1,00,000 + 30% of total income exceeding Rs. 10,00,000

Income tax slab rate for new tax regime – FY 2020-21 (AY 2021-22)

Income	Tax Rate
Up to Rs 2.5 Lakh	No Tax
Between Rs. 2.5 lakh and Rs. 5 lakhs	5% Tax
Between Rs. 5 lakh and Rs. 7.5 lakhs	10% Tax
Between Rs 7.5 Lakh and Rs. 10 Lakh	15% Tax
Between Rs.10 lakhs to Rs.12.5 lakh	20% Tax
Between Rs.12.5 lakhs to Rs.15 lakhs	25% Tax
Above Rs. 15 lakhs	30% Tax

Surcharge Applicable on Tax

Income limit	Surcharge Rate
Net income exceeds Rs 50 lakh but doesn’t exceed Rs 1 crore	10%
Net income above Rs 1 crore but doesn’t exceed Rs 2 crore	15%
Net income exceeds Rs 2 crore but doesn’t exceed Rs 5 crore	25%
Net income exceeds Rs 5 crore	37%

Additional Health and Education Cess of 4% on tax along with surcharge is also applicable.

Conclusion:

Both systems have their own merit and demerit. The new tax system is comparatively simple but in old tax system there are many exemptions / deductions available, which give people habit to invest in tax saving schemes. Hence, it is advisable to do a comparative evaluation and analysis under both regimes and then choose the most beneficial one as it may vary from person to person.

Note:

Please note that the tax rates in the New tax regime is the same for all categories of Individuals, i.e Individuals & HUF upto 60 years of age, Senior citizens above 60 years upto 80 years , and Super senior citizens above 80 years. Hence no increased basic exemption limit benefit will be available to senior and super senior citizens in the New Tax regime.
Individuals with Net taxable income less than or equal to Rs 5 lakh will be eligible for tax rebate u/s 87A i.e tax liability will be nil of such individual in both – New and old/existing tax regimes.

Income Tax Slab Rates for the FY 2020-21 (AY 2021-22) for Companies

All Corporate companies registered under law are categorized as Domestic company and Foreign company. The entities are liable to pay the tax under the Corporate Tax regime popularly known as Corporate Tax.

The tax is calculated on the net profits that companies have earned from their businesses during the F.Y. and tax rates are prescribed as per the provisions of Income Tax Act 1961.

Income Tax Slabs Rates of Domestic Companies

Turnover Particulars	Tax Rate
Gross turnover up to 400 Crore	25%
Gross turnover exceeding 400 Crore	30%
Where the company opted for Section 115BA	25%
Where the company opted for Section 115BAA	22%
Where the company opted for Section 115BAB	15%

Surcharge Applicable on Tax

Annual Income Limit	Surcharge Rate
Annual income exceeds ₹1 Crore but doesn’t exceed ₹10 Crore	7%
Annual income exceeds ₹10 Crore	12%

Company opting for Section 115BAA or 115BAB shall be applicable for a surcharge rate of 10% irrespective of the income.
Additional Health and Education Cess of 4% on tax along with surcharge is also applicable.