Income Tax Calculation
The Indian Government declares the various Tax Slabs applicable in its yearly budget. Each group has its own slab defined and taxed accordingly
Tax Regime
From FY 2020-21, one can choose to pay income tax under an optional new tax regime. The new tax regime is available only for individuals and HUFs. The new regime provides for Lower tax rates but no deductions/exemptions. Provisions of the new tax regime is covered under section 115BAC of the Income-tax Act inserted by the Finance Act 2020. The taxpayer opting for concessional rates in the New Tax Regime will not be allowed certain Exemptions and Deductions (such as 80C, 80D,80TTB, HRA) available in the Existing Tax Regime.
One can choose to opt for the older regime which provides for multiple deductions but has higher tax Slabs
Tax Slabs
For Individual (resident or non-resident) less than 60 years of age anytime during the previous year:
For Individual (resident or non-resident), 60 years or more but less than 80 years of age anytime during the previous year:
For Individual (resident or non-resident) 80 years of age or more anytime during the previous year:
An Individual is eligible for multiple tax exemptions and deductions if opted for the older regime. These are explained in the next topic