All About Income Tax Slabs and the Income Tax Calculator
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All About Income Tax Slabs and the Income Tax Calculator 

Every taxpayer should have a clear understanding of various income tax brackets before filing the taxes. Furthermore, understanding the different tax regimes can also help an individual to reduce his tax burden.

While many people continue to dread the thought of understanding the working of income tax, it is actually easy to understand once you know the various income tax slabs.

Read further to know about these tax slabs and how you can find out your tax dues through an online income tax calculator.

Two Tax Regime

The central government has started two tax regimes since the union budget 2020. Under this new system, the taxpayers can choose either the old tax regime or the new tax regime while calculating their income tax liability. 

While the old tax regime provides the facilities for tax exemptions and rebates under various sections, the new tax regime has done away with most of these exemptions. However, the new tax regime offers concessional tax rates against relatively more flexible income tax slabs.

Income Tax Slabs Under The Old Tax Regime

Income tax Slabs Rate of  Income Tax 
Age Below 60 Years Age between 60 to 80 Years Age above 80 years
Up to Rs 2.5 lakhs Nil Nil Nil
Rs 2.5 lakhs to Rs 3 Lakhs 5%                                                                           

  (Tax rebate applicable under section 87A)

Rs 3 lakhs to Rs 5 lakhs 5%                                                                                              

  (Tax rebate applicable under section 87A)

Rs 5 lakhs to Rs 10 lakhs 20%
Greater than Rs 10 lakhs 30%

Income Tax Slabs Under The New Tax Regime

Income Tax Slabs Rate of Income Tax
Up to Rs 2.5 lakhs Nil
Rs 2.5 lakhs to Rs 3 Lakhs 5%                                                                           

  (Tax rebate applicable under section 87A)

Rs 3 lakhs to Rs 5 lakhs
Rs 5 lakhs to Rs 7.5 lakhs 10%
Rs 7.5 lakhs to Rs 10 lakhs 15%
Rs 10 lakhs to Rs 12.50 lakhs 20%
Rs 12.5 lakhs to Rs 15 lakhs 25%
Greater than Rs 15 lakhs 30%

Important Points to Remember Before Choosing The Old or New Tax Regime

  • Health and Education cess at the rate of 4% will be charged on the total tax liability irrespective of the old or new tax regime.
  • Additional surcharge will be applicable on high net worth individuals under the new tax regime as per the rates given below-
HNI Category Surcharge Rates
Income greater than Rs 50 lakhs 10%
Income greater than Rs 1 crore 15%
Income greater than Rs 2 crore 25%
Income greater than Rs 5 crore 37%

 

  • Under the new tax regime, the income tax slab rate will be the same for all individuals irrespective of age.

Using Income Tax Calculator

If you are confused about whether to choose the old tax regime or the new one to file tax returns, then you can take the help of an online income tax calculator provided on the official website of many reputed insurance firms. 

You only need to enter personal details, income details, and investment details in the designated areas inside the tax calculator. Submit this form to generate your income tax details. The tax calculator will provide you with the income tax liabilities under the old tax regime as well as the new one.

Now, you can compare both figures and choose the tax regime that allows you to save the maximum amount of income tax.

Remember that tax slabs and rates are not static. The government often makes changes to them to make them more friendly to the general public. You should keep an eye on the union budget presented by the finance minister to know any such changes.

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