Every taxpayer is required to pay income tax based on the income tax slab they fall under. Every year, the finance minister of India announces the income tax slabs. As per the current budget 2022, no changes have been made to the income tax bracket. Currently, there are two different income tax regimes. Under the old regime, the individuals can avail tax benefits whereas, under the new regime no tax benefits can be availed.
The income tax is the tax levied by the government on the income earned by individuals and businesses. The income tax slab helps an individual to decide whether his/her income is taxable or not. It is imperative to file an income tax return to justify the income earned. Moreover, to avail tax advantages to the fullest, it is important to understand the income tax bracket one falls under.
Let’s take a look at the Income Tax Slab Rates for Financial Year 2021-2022.
Income Tax Slab Rates FY 2021-22 & AY 2022-23 for Individuals Opting for Old Tax Regime
- Individuals below the age of 60 years
- NRI
- Hindu Undivided Family (HUF)
- Associate of person, Body of Individuals and Artificial Judicial Person
| Income Slab (in Rs.) | Income Tax Rate |
|---|---|
| Up to 2,50,000 | NIL |
| 2,50,000- 5,00,000 | 5% of the amount exceeding Rs. 2,50,000 |
| 5,00,000- 10,00,000 | 20% of amount exceeding 5,00,000 + Rs. 12,500 |
| 1,000,000 & Above | 30% of amount exceeding 1,000,000 + Rs. 1,12,500 |
Surcharge
- 10% of income tax where total income exceeds Rs. 50,00,000
- 15% of income tax where total income exceeds Rs. 1,00,00,000
- 25% of income tax where total income exceeds Rs. 2,00,00,000
- 37% of income tax where total income exceeds Rs. 5,00,00,000
*Health and Education Cess :- 4% of income tax and surcharge
Income Tax Rates FY 2021-22 & AY 2022-23 for Hindu Undivided Family (HUF) for Old Tax Regime
| Income Slab (in Rs.) | Income Tax Rate |
|---|---|
| Up to 2,50,000 | NIL |
| 2,50,000- 5,00,000 | 5% of the amount exceeding Rs. 2,50,000 |
| 5,00,000- 10,00,000 | 20% of amount exceeding 5,00,000 + Rs. 12,500 |
| 1,000,000 & Above | 30% of amount exceeding 1,000,000 + Rs. 1,12,500 |
Surcharge
- 10% of income tax where total income exceeds Rs. 50,00,000
- 15% of income tax where total income exceeds Rs. 1,00,00,000
- 25% of income tax where total income exceeds Rs. 2,00,00,000
- 37% of income tax where total income exceeds Rs. 5,00,00,000
*Health and Education Cess:- 4% of income tax and surcharge
Income Tax Slab Rates FY 2021-22 & AY 2022-23 for Senior Citizens (Above 60 years but Below 80 years)
| Income Slab (in Rs.) | Income Tax Rate |
|---|---|
| Up to 3,00,000 | NIL |
| 3,00,000- 5,00,000 | 5% of the amount exceeding Rs. 3,00,000 |
| 5,00,000- 10,00,000 | 20% of amount exceeding 5,00,000 + Rs. 10,000 |
| 1,000,000 & Above | 30% of amount exceeding 1,000,000 + Rs. 1,10,000 |
Surcharge
- 10% of income tax where total income exceeds Rs. 50,00,000
- 15% of income tax where total income exceeds Rs. 1,00,00,000
- 25% of income tax where total income exceeds Rs. 2,00,00,000
- 37% of income tax where total income exceeds Rs. 5,00,00,000
*Health and Education Cess:- 4% of income tax and surcharge
Income Tax Slab Rates FY 2021-22 & AY 2022-23 for Senior Citizens (Above 80 Years of Age)
| Income Slab (in Rs.) | Income Tax Rate |
|---|---|
| Up to 5,00,000 | NIL |
| 5,00,000- 10,00,000 | 20% of amount exceeding Rs. 5,00,000 |
| 1,000,000 & Above | 30% of amount exceeding 1,000,000 + Rs. 1,00,000 |
Surcharge
- 10% of income tax where total income exceeds Rs. 50,00,000
- 15% of income tax where total income exceeds Rs. 1,00,00,000
- 25% of income tax where total income exceeds Rs. 2,00,00,000
- 37% of income tax where total income exceeds Rs. 5,00,00,000
*Health and Education Cess:- 4% of income tax and surcharge
Note- A resident individual is eligible for tax exemption under Section 87A if the total income does not exceed Rs. 5,00,000. The amount of exemption shall be 100% of income tax or Rs.12,500, whichever is less.
Income Tax Slab Rates FY 2021-22 & AY 2022-23 for Individuals and Hindu Undivided Family (HUF)- As per the New Regime
| Income Slab (in Rs.) | Income Tax Rate |
|---|---|
| Upto 2,50,000 | NIL |
| 2,50,000- 5,00,000 | 5% of the amount exceeding Rs. 2,50,000 |
| 5,00,000- 7,50,000 | 10% of the amount exceeding 5,00,000 + Rs. 12,500 |
| 7,50,000- 10,00,000 & above | 15% of the amount exceeding 7,50,000 + Rs. 37,500 |
| 10,00,000 – 1,250,000 | 20% of the amount exceeding 10,00,000 + Rs. 75,000 |
| 12,50,000-1,500,000 | 25% of the amount exceeding 12,50,000 + Rs, 1,25,000 |
| 1500,000 & above | 30% of the amount exceeding 1,500,000 + Rs. 1,87,500 |
Surcharge
- 10% of income tax where total income exceeds Rs. 50,00,000
- 15% of income tax where total income exceeds Rs. 1,00,00,000
- 25% of income tax where total income exceeds Rs. 2,00,00,000
- 37% of income tax where total income exceeds Rs. 5,00,00,000
*Health and Education Cess:- 4% of income tax and surcharge
Income Tax Slab Rate for FY 2021-22 & AY 2022-23 for NRI
| Income Slab (in Rs.) | Income Tax Rate |
|---|---|
| Upto 2,50,000 | NIL |
| 2,50,000- 5,00,000 | 5% of the amount exceeding Rs. 2,50,000 |
| 5,00,000- 7,50,000 | 10% of the amount exceeding 5,00,000 + Rs. 12,500 |
| 7,50,001- 10,00,000 & | 15% of the amount exceeding 7,50,000 + Rs. 37,500 |
| 10,00,000 – 1,250,000 | 20% of the amount exceeding 10,00,000 + Rs. 75,000 |
| 12,50,000-1,500,000 | 25% of the amount exceeding 12,50,000 + Rs, 1,25,000 |
| 1500,000 & above | 30% of the amount exceeding 1,500,000 + Rs. 1,87,500 |
Surcharge
- 10% of income tax where total income exceeds Rs. 50,00,000
- 15% of income tax where total income exceeds Rs. 1,00,00,000
- 25% of income tax where total income exceeds Rs. 2,00,00,000
- 37% of income tax where total income exceeds Rs. 5,00,00,000
*Health and Education Cess:- 4% of income tax and surcharge
Income Tax Rate for FY 2021-22 & AY 2022-23 for Partnership Firm
A partnership firm including Limited Liability Partnership (LLP) is taxable at 30%. Plus a surcharge of 7% of tax is applicable where the total income exceeds Rs.1 crore.
Tax Rates for Domestic Companies
| Particulars | Income Tax Rate |
|---|---|
| Company opting for Section 115BA | 25% |
| Company having a gross receipt or turnover of up to Rs. 250 crore in the previous year | 25% |
| Company opting for Section 115 BAA | 22% |
| Company opting for Section 115 BAB | 15% |
| Company having a gross receipt or turnover exceeding Rs. 250 crore in the previous year | 30% |
Surcharge:
| Company | Range of Total Income | ||
|---|---|---|---|
| Rs. 1 crore or less | Above Rs.1 crore but upto Rs. 10 crore | Above 10 crore | |
| Domestic company opting for section 115BA | Nil | 7% | 12% |
| Domestic company opting for section 115 BAA | 10% | 10% | 10% |
| Domestic company opting for section 115 BAB | 10% | 10% | 10% |
| Any other domestic company | Nil | 7% | 12% |
*Health and Education Cess:- 4% of income tax and surcharge
Tax Rates For Foreign Companies
A foreign company is liable to pay income tax at 40% of taxable income. Moreover, a surcharge of 2% is also applicable if the income exceeds Rs.1 crore and a 5% surcharge is applicable if the income exceeds Rs. 10 crores.
| Income Slab | Income Tax Rate |
|---|---|
| On total income as consists of:1. royalties received from the government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after 31-3-1961 but before 1-4-1976; or2. (b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after 29-2-1964 but before 1-4-1976, and where such agreement has, in either case, been approved by the Central Government | 50% |
| On balance, if any, of the total income | 40% |
*Health and Education Cess:- 4% of income tax and surcharge
Income Tax Slab Rates for Co-operative Society
| Income Slab | Income Tax Rate |
| Up to Rs. 10,000 | 10% of the income |
| Rs. 10,000- Rs.20,000 | 1000 + 20% of (Total income minus Rs.10,000) |
| Above Rs. 20,000 | Rs. 3,000 + 30% of (Total income minus Rs. 20,000) |
Income Tax Slab Rates for Local Authority
| Income Slab | Income Tax Rate |
| Total Income | 30% |
Income Tax Slab Rates for Partnership Firm & LLP
| Income Slab | Income Tax Rate |
| Total Income | 30% |
Wrapping it Up: Even though no major changes have been made to the income tax bracket in budget 2022, the tax deduction limit is increased from 10% to 14% for Central and State government employees, stating that this would help the social security benefits of state government employees and bring them at par with the central government employees. As per the new budget 2022, the government focuses on fast-tracking the economy, providing opportunities to businesses and creating six million new jobs.
How income tax is collected by the government?
- Tax Collected at Source (TCS)
- Tax Deducted at Source (TDS) from the income of the receiver
- Voluntary payment of taxpayer money into a different designated bank. For example, self-assessment tax and advance tax is paid by the taxpayers
How is the income of a taxpayer classified?
- Salaried individuals
- Capital Gains
- Profit/gains from a profession or business
- Income from house property
- Income from other sources
