Clipped from: https://economictimes.indiatimes.com/wealth/tax/no-changes-in-income-tax-slabs-rates-deductions-exemptions-in-budget-2021/articleshow/80628697.cmsSynopsis
With no change in the basic exemption limit, income tax slabs and rates, an individual tax payer will continue to pay the tax at the same rates applicable in FY 2020-21.
Belying huge expectations, Budget 2021 has not provided any income tax relief to tax payers. No changes in income tax slabs or rates have been proposed. Nor have any additional tax exemptions or deductions been introduced. Standard deduction for the salaried and pensioners also remains same as before.
With no change in the basic exemption limit, income tax slabs and rates, an individual tax payer will continue to pay the tax at the same rates applicable in FY 2020-21.
Do keep in mind that effective from April 1, 2021, a salaried individual has to choose between the new and old tax regimes. Budget 2020 introduced a new income tax regime with reduced tax rates for those willing to forego 70 tax-exemptions and deductions under it.
This new tax system has been made optional and continues to co-exist with the old/existing one which comprises three tax rates and various tax exemptions and deductions available to a taxpayer. Commonly availed tax-exemptions and deductions include tax exemption on house rent allowance, standard deduction, leave travel allowance, section 80C, section 80D deductions etc.
Individuals with a net taxable income of up to Rs 5 lakh in a financial year will be able to avail tax rebate of Rs 12,500 under section 87A in both the existing/old and new concessional tax regimes. Effectively, individual taxpayers with net taxable income of up to Rs 5 lakh will continue to pay zero tax in both the tax regimes.
Income tax rates and slabs under new tax regime for FY 2021-22
| Total income (Rs) | Income tax rate |
| Up to 2.5 lakh | Nil |
| From 2,50,001 to Rs 5,00,000 | 5 percent |
| From 5,00,001 to Rs 7,50,000 | 10 percent |
| From 7,50,001 to 10,00,000 | 15 percent |
| From 10,00,001 to Rs 12,50,000 | 20 percent |
| From 12,50,001 to 15,00,000 | 25 percent |
| Above 15,00,000 | 30 percent |
Under the existing/old tax regime, the basic tax exemption limit for an individual depends on their age and residential status. Here is a look at the latest income tax slabs for FY 2021-22 under old tax regime:
Income tax slabs for resident individuals below 60 years of age for 2020-21
| Taxable income slabs | Income tax rates and cess |
| Up to Rs 2.5 lakh | Nil |
| Rs 2,50,001 to Rs 5,00,000 | 5% of (Total income minus Rs 2,50,000) + 4% cess |
| Rs 5,00,001 to Rs 10,00,000 | Rs 12,500 + 20% of (Total income minus Rs 5,00,000) + 4% cess |
| Rs 10,00,001 and above | Rs 1,12,500 + 30% of (Total income minus Rs 10,00,000) + 4% cess |
Income tax slabs for resident individual between 60 and 80 years of age (Senior Citizen) for FY 2020-21
| Taxable income slabs | Income tax rates and cess |
| Up to Rs 3 lakh | Nil |
| Rs 3,00,001 to Rs 5,00,000 | 5% of (Total income minus Rs 3,00,000) + 4% cess |
| Rs 5,00,001 to Rs 10,00,000 | Rs 10,000 + 20% of (Total income minus Rs 5,00,000) + 4% cess |
| Rs 10,00,001 and above | Rs 1,10,000 + 30% of (Total income minus Rs 10,00,000) + 4% cess |
Income tax slabs for resident individual above 80 years of age (Super Senior Citizen) FY 2020-21
| Taxable income slabs | Income tax rates and cess |
| Up to Rs 5 lakh | Nil |
| Rs 5,00,001 to Rs 10,00,000 | 20% of (Total income minus Rs 5,00,000) + 4% cess |
| Rs 10,00,001 and above | Rs 1,00,000 + 30% of (Total income minus Rs 10,00,000) + 4% cess |
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