File an ITR? Check the different tax brackets and rates in the new income tax system | Personal finance news
New Delhi: The new income tax regime was launched by the government in 2020. People under the old tax regime were eligible to claim deductions such as Section 80C, Section 80D, etc. of the Income Tax Act 1961, as well as tax exemptions such as housing allowance, LTC cash voucher scheme, etc., but they must waive these under the current regime.
The new preferential tax regime, on the other hand, offers lower tax rates than the old tax regime. Those undecided about which tax regime to choose should consult the latest tax rates and brackets applicable under the regime.
Income tax rates and slabs in the new tax regime for the 2021-22 financial year
Up to 2,50,000 – None
From 2,50,001 to 5,00,000 – 5 percent
5,00,001 to 7,50,000 – 10%
7,50,001 to 10,00,000 – 15 percent
10,00,001 to 12,50,000 – 20%
12,50,001 to 15,00,000 – 25 percent
Above 15,00,000 – 30%
The new tax regime assesses the highest tax rate of 30% on people whose income starts at Rs 15,00,001, while the old regime imposed it on people whose income starts at Rs 10,00,001.
However, the new regime would not provide for deductions such as investments in the Employees Provident Fund (EPF), the Public Provident Fund (PPF), or the tax exemption on rents paid or food stamps obtained, among others.
It only provides a deduction under Section 80CCD(2) of the Income Tax Act, namely a deduction for the employer’s payment to the NPS Level I account. A person can claim a maximum deduction of 10% of his base salary plus DA during a tax year.