Ahead of Budget 2022, here’s a look at current income tax slabs

Union Finance Minister Nirmala Sitharaman will present the full year budget for the financial year 2022-23 on February 1, 2022. Citizens across India are awaiting annual budget announcements relating to tax brackets on income.

In the latest budget – the first full-fledged Union budget since COVID-19 became a pandemic – there were no changes to income tax brackets. However, in the last to last budget, Sitharaman introduced a new tax structure, giving an individual the choice of paying tax under the new structure with lower rates but waiving deductions or continuing to pay tax. tax under existing tax laws and to claim applicable exemptions.

Under current rules, a slab system operates across the country, where different tax rates have been prescribed for different slabs.

There are three categories of individual taxpayers: individuals (under 60) who include both residents and non-residents, senior residents (60 and over but under 80) and super-senior residents (over 80 years old). year).

Currently, 7 income brackets are available under the new tax regime. According to her, annual income up to Rs 2.5 lakh is tax exempt. People earning between Rs 2.5 lakh and Rs 5 lakh have to pay 5% tax. Income between Rs 5 and 7.5 lakh is taxed at 10%, while those between Rs 7.5 and 10 lakh at 15%.

Those earning between Rs 10 and Rs 12.5 lakh have to pay tax at the rate of 20%, while those between Rs 12.5 and Rs 15 lakh have to pay at the rate of 25%. Income above Rs 15 lakh is taxed at 30%.

This structure does not allow exemptions under Section 80C. Home loan exemption, insurance exemptions, standard deduction are also not eligible for the scheme.

Meanwhile, under the old tax system, if an individual’s total income does not exceed Rs 2.5 lakh, the tax rate is zero. If the income falls within the Rs 2.5 lakh-Rs 5 lakh bracket, an income tax of 5% is due. However, those earning up to Rs 5 lakh can claim a refund of Rs 12,500 under Section 87A of the Income Tax (IT) Act.

For people earning Rs 5 lakh to Rs 10 lakh, tax is deducted at the rate of 20%. If an individual’s total income is more than Rs 10 lakh, a tax of 20% is due.

(Edited by : Aditi Gautam)

First post: STI

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