Income Tax slab for FY 2020-21, AY 2021-22

Budget 2020 has announced a new income tax regime following which individuals will have the option to pay taxes as per new tax slabs from FY 2020-21 onward.

Income Tax Slabs for individuals below 60 years of age under new tax regime – Applicable to FY 2020-21 (AY 2021-22)

Income Tax Slab	Tax Rate
Up to Rs 2.5 lakh	NIL
Rs 2.5 lakh to Rs 5 lakh	5% (Tax rebate of Rs 12,500 available under section 87A)
Rs 5 lakh to Rs 7.5 lakh	10%
Rs 7.5 lakh to Rs 10 lakh	15%
Rs 10 lakh to Rs 12.5 lakh	20%
Rs 12.5 lakh to Rs 15 lakh	25%
Rs 15 lakh and above	30%

Note I: Addition to the health and education cess of 4% is applicable on basic Tax

Note II: An individual opting to be taxed under the new tax regime from FY 2020-21 onward will have to give up certain exemptions and deductions which are listed below:

1.    Leave Travel Allowance (LTA)

2.    House Rent Allowance (HRA)

3.    Conveyance

4.    Daily expenses in the course of employment

5.    Relocation allowance

6.    Helper allowance

7.    Children education allowance

8.    Other special allowances [Section 10(14)]

9.    Standard deduction

10.  Professional tax

11.  Interest on housing loan (Section 24)

12.  Chapter VI-A deduction (80C,80D, 80E and so on) (Except Section 80CCD(2) and 80JJA)

Note III: Points to remember while opting for the new tax regime

Ø  Option to be exercised on or before the due date of filing return of income for AY 2021-22

Ø  In case of a taxpayer having business income, the option once exercised can be withdrawn only once. Further, if the taxpayer withdraws the option, he will never be able to opt-in the option again.

According to the current income tax laws in India, the income tax rate on resident individuals varies based on their age. There are different tax slabs applicable to the individuals for the financial year 2018-19 and 2019-20. For instance, a resident individual, aged below 60 years, with an income less than Rs 2.5 lacs is exempt from paying income tax

For old slab if new slabs rate is not opted click on the link below:

https://gyandeep1477.blogspot.com/2019/01/income-tax-slabe-for-ay-2019-20.html