In the union budget for the year 2020, new income tax slabs has been introduced in a completely new tax regime by the Govt. This new tax regime is optional. Anyone who wants to opt into this new tax regime can avail new income tax rats but should give up almost all of tax deductions.
Income Tax Slabs in New Tax Regime
| New Tax Regime – FY 2020-21 | Income Tax Rate |
|---|---|
| Up to ₹ 2,50,000/- | NIL |
| From ₹ 2,50,001/- to ₹ 5,00,000/- | 5% |
| From ₹ 5,00,001/- to ₹ 7,50,000/- | 10% |
| From ₹ 7,50,001/- to ₹ 10,00,000/- | 15% |
| From ₹ 10,00,001/- to ₹ 12,50,000/- | 20% |
| From ₹ 12,50,001/- to ₹ 15,00,000/- | 25% |
| From ₹ 15,00,001/- and above. | 30% |
Income Tax Slabs in Old Tax Regime
| Old Tax Regime (FY 2020-21) | Income Tax Rate |
|---|---|
| Up to ₹ 2,50,000/- | NIL |
| From ₹ 2,50,001/- to ₹ 5,00,000/- | 5% |
| From ₹ 5,00,001/- to ₹ 10,00,000/- | 20% |
| From ₹ 10,00,001/- and above. | 30% |
Below are the few exceptions to the above income tax slabs on both tax regimes.
- Pls note that, on both the tax regimes, if the total taxable income is less than ₹ 5,00,000/- then it becomes its totally tax free.
- For senior citizens (above 60yrs age and below 80 yrs), first income tax slab will be up to ₹ 3,00,000/-.
- For super senior citizens for the age above 80yrs, the first tax slabs will be up to ₹5,00,000/-. and there will be no 5% income tax slab.
- On New Tax Regime, no deductions are allowed except NPS (National Pension Scheme). This new tax regime will benefit only those who have nothing to claim as deductions.
For you to understand which tax regime fits you best, we have designed a new tax calculator which considers all the rules and calculates total tax under two regimes.