Income at different levels is taxed at different rates. These rates are known as slab rates. You will have to pay tax based on the slab rates your income falls under.
Read on to know more about income tax slab rates.
Every earning individual is required to pay income tax if their income falls under taxable income. The tax is levied based on the income tax slab.
The taxpayers are divided into three categories based on their age-
- Individuals below 60 years of age. The tax exemption limit for such individuals is Rs. 2.5 Lakhs.
- Individuals between 60 and 80 years of age. The tax exemption limit for such individuals is Rs. 3 Lakhs.
- Individuals above 80 years of age. The tax exemption limit for such individuals is Rs. 5 Lakhs.
Income Tax Slab Rates for Every Category
Tax Rates for Individuals Below 60 Years of Age-
| Income | Tax Rate |
| Below Rs. 2.5 Lakhs | 0 |
| Between Rs. 2.5 Lakhs and Rs. 5 Lakhs | 5% |
| Between Rs. 5 Lakhs and Rs. 10 Lakhs | 20% |
| Above Rs. 10 Lakhs | 30% |
Tax Rates for Individuals Between 60 and 80 Years of Age-
| Income | Tax Rate |
| Below Rs. 3 Lakhs | 0 |
| Between Rs. 3 Lakhs and Rs. 5 Lakhs | 5% |
| Between Rs. 5 Lakhs and Rs. 10 Lakhs | 20% |
| Above Rs. 10 Lakhs | 30% |
Tax Rates for Individuals Above 80 Years of Age-
| Income | Tax Rate |
| Below Rs. 5 Lakhs | 0 |
| Between Rs. 5 Lakhs and Rs. 10 Lakhs | 20% |
| Above Rs. 10 Lakhs | 30% |
These tax rates are applicable if you opt to pay tax as per the old tax regime. However, the tax rates are different in the new tax regime.
In the Union Budget 2020, Nirmala Sitharaman, the finance minister of India, introduced a new tax regime. The tax rates in this regime are lower as compared to the old regime. However, if you opt for the new tax regime, then you will have to forgo most of the exemptions and deductions. Furthermore, the tax exemption limit for every age group as per the new tax regime is Rs. 2.5 Lakhs.
Income Tax Slab Rates as Per the New Tax Regime
| Income | Tax Rate |
| Below Rs. 2.5 Lakhs | 0 |
| Between Rs. 2.5 Lakhs and Rs. 5 Lakhs | 5% |
| Between Rs. 5 Lakhs and Rs. 7.5 Lakhs | 10% |
| Between Rs. 7.5 Lakhs and Rs. 10 Lakhs | 15% |
| Between Rs. 10 Lakhs and Rs. 12.5 Lakhs | 20% |
| Between Rs. 12.5 Lakhs and Rs. 15 Lakhs | 25% |
| Above Rs. 15 Lakhs | 30% |
Exemptions and Deductions That Can’t Be Availed in the New Tax Regime
- You will have to forgo housing and leave travel allowance.
- If you opt for the new tax regime, then you will have to forgo the standard deduction of Rs. 50,000.
- You will also have to forgo Section 80C deductions.
- Section 80D deductions aren’t allowed in the new tax regime.
Apart from these, there are other exemptions and deductions that you will have to forgo.
Exemptions and Deductions That Can Be Availed in the New Tax Regime
- The employer’s contribution to NPS account under Section 80CCD(2) is eligible for deduction. However, the deduction limit is 10% of the employee’s previous annual salary.
- The sum assured received on maturity or surrender of a life insurance policy is exempted from tax under Section 10(10D).
- The lump sum maturity amount received from the NPS can be claimed for tax exemption.
