Income Tax Slab Rates For Individuals Under The Old And New Tax Regime

Income Tax is charged on the individuals as per the income(s) earned by them. The tax to be paid is Income tax is direct tax paid by the individuals  depending upon the income(s) earned or achieved during the relevant financial year. The amount of the tax to be paid is decided by the Government and this is divided in various income tax slabs/rates. These rates are however, amended by Government from time to time. 

In the budget of 2020, our Finance Minister Ms. Nirmala Sitharaman had announced a new tax regime at lower income tax slab rates. If the individuals opts for this scheme, then he will have to forego majority of the deductions and exemptions available under the old tax regime. The individuals are given an option to choose between the old and new tax regime. The choosing of the tax regime can be done by the person at any time before the filing of the Income Tax Return.

Old Tax Regime
The old tax regime has classified individuals into three categories:
– Individuals (aged less than of 60 years) including residents and non-residents
– Resident senior citizens (aged between 60 to 80 years)
– Resident super senior citizens ((aged more than 80 years)

The Income Tax Slab Rates under the Old Tax Regime are as follows: 

New Tax Regime
The new tax regime does not differentiate in individuals on the basis of age group. The income tax slab rate is same for all the individuals falling under the relevant income slab. The individuals, however have to choose either the following:
– To pay income tax at lower rates as per the new tax regime and forgo majority of the deductions and exemptions, or
– To continue to pay taxes at higher rate under the old tax regime and avail the deductions and exemptions.

The Income Tax Slab Rates under the New Tax Regime are as follows:

Note:
– Under the old and new tax regime, individuals with net taxable income less than or equal to Rs. 5 lacs are eligible for tax rebate under Section 87A of the Income Tax Act. Therefore, the tax liability of individuals is “NIL” under both the income tax regimes provided the net taxable income is below Rs. 5 lacs.
– Additional cess of 4% pertaining to Health and Education shall be levied on the income tax liability.
– Additional surcharge on income shall be levied in the following cases:

Therefore, to sum it up, the Income Tax Slab Rates under the New Tax Regime and Old Tax Regime are as follows:

Please note that under both of the income tax regimes, higher the income is, higher the income tax rate will be.

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