New Delhi: There is no change in the General Budget 2021 regarding the income tax slab. In this case, two options of the previous income tax slab will remain applicable. However, in Budget 2021, senior citizens above 75 years have got some relief. The budget proposes that if senior citizens above 75 years of age have pension income and interest income as their sole source of income, they will not be required to file income tax returns. In the case of such senior citizens, banks will automatically deduct TDS.
Select a tax slab
In the Budget 2020, the Finance Ministry gave two income tax options for the salary class. These options are effective from FY 2020-21. With no change in the income tax slab in Budget 2021, these options will also be applicable in the new financial year. Taxpayers can choose either of these two options while filing their income tax return. One of these two options is the old / existing tax slab and the other option is the new tax slab, which was introduced in the budget 2020.
Apart from the rates in the new tax slabs brought in the previous budget, the major difference is that it has eliminated various exemptions, while the old / existing tax slabs are getting different tax rebates. Also, in all cases, 4 percent health and education cess is charged with income tax liability. Let us know in detail about both these tax slabs.
New tax slab brought in budget 2020
The rates in the tax slabs brought in the General Budget 2020 are low, but in this the other tax exemptions and other tax exemptions received under section 80C have been abolished. There is no tax on income up to Rs 2.5 lakh in the tax slab brought in the last budget. Income from 2.5 lakh to 3 lakh rupees is taxed at the rate of 5 percent. Also, U / S 87A is exempt from tax of Rs 12,500.
Income from three lakh to five lakh rupees is also taxed at the rate of 5 per cent like the previous class and tax exemption of Rs 12,500 under U / S 87A. In this way, there will be no tax liability due to the tax exemption under 87A up to income up to five lakh rupees in this tax slab.
Further, income from Rs 5 to 7.5 lakh is taxed at the rate of 10 per cent. Income from 7.5 to 10 lakhs is taxed at the rate of 15 percent. Income from 10 to 12.50 lakhs is taxed at the rate of 20 percent. Income from 12.5 lakh to 15 lakh is taxed at the rate of 25 percent. After this, there is tax at the rate of 30 percent on income above Rs 15 lakh.
The rates are the same for all age groups in the new tax slab
The income tax rates in the tax slabs brought in the Budget 2020 are the same for people up to the age of 60 years, senior citizens from 60 years to 80 years of age and super senior citizens above the age of 80 years.
Income tax rates as per old / existing tax slabs
Here too, no tax is payable on income of Rs 2.5 lakh. Income from 2.5 lakh to 5 lakh is taxed at the rate of 5 percent. Income from Rs 5 lakh to Rs 10 lakh is taxed at the rate of 20 percent. Income above Rs 10 lakh is taxed at the rate of 30 per cent. Tax exemption is also available under 87A on income of Rs 2.5 to 5 lakh in the tax slab of this age group.
Income tax rates as per old / existing tax slabs
There is no tax payable on income up to 3 lakh. Income from Rs 3 to 5 lakh is taxed at the rate of 5 percent. Income from Rs 5 to 10 lakh is taxed at the rate of 20 percent. Income of more than one million is taxed at the rate of 30 percent. In this age group, income from 3 to 5 lakhs is also tax-exempt under 87A.
