1. What is income tax slab ?
Indian Income tax levies tax on individual taxpayers on the basis of a slab system. Slab system means different tax rates are prescribed for different ranges of income. It means the tax rates keep increasing with an increase in the income of the taxpayer. This type of taxation enables progressive and fair tax systems in the country. Such income tax slabs tend to undergo a change during every budget. These slab rates are different for different categories of taxpayers. Income tax has classified three categories of “individual “taxpayers such as:
- Individuals (aged less than of 60 years) including residents and non-residents
- Resident Senior citizens (60 to 80 years of age)
- Resident Super senior citizens (aged more than 80 years)
2. Income Tax Slab Rates for FY 2021-22 (AY 2022-23 )
a. Income tax slab rate for FY 2021-22 (AY 2022-23), New Tax regime – Why is it optional?
In this new regime, taxpayers has an OPTION to choose either :
- To pay income tax at lower rates as per New Tax regime on the condition that they forgo certain permissible exemptions and deductions available under income tax, Or
- To continue to pay taxes under the existing tax rates.The assessee can avail rebates and exemptions by staying in the old regime and paying tax at the existing higher rate.
Income tax slab rate FY 2021-22 (AY 2022-23) – Applicable for New Tax regime
| Income Tax Slab | New Regime Income Tax Slab Rates FY 2021-22 (Applicable for All Individuals & HUF) |
|---|---|
| Rs 0.0 – Rs 2.5 lakh | NIL |
| Rs 2.5 lakh – Rs 3.00 lakh | 5% (tax rebate u/s 87a is available) |
| Rs 3.00 lakh – Rs 5.00 lakh | |
| Rs 5.00 lakh- Rs 7.5 lakh | 10% |
| Rs 7.5 lakh – Rs 10.00 lakh | 15% |
| Rs 10.00 lakhs – Rs 12.50 lakh | 20% |
| Rs 12.5 lakhs – Rs 15.00 lakh | 25% |
| > Rs 15 lakh | 30% |