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.
Income Tax Slab Rates for Foreign Companies
Particular |
Income Tax |
Foreign company operating in India |
40% |
Surcharge Applicable on Tax
Income Limit |
Surcharge Rate |
Net income exceeds ₹ 1 Crore but doesn’t exceed ₹ 10 Crore |
2% |
Net income exceeds ₹ 10 Crore |
5% |
Additional Health and Education Cess of 4% on tax along with surcharge is also applicable.
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