Income tax Rates Slab for FY 2020-21 or AY 2021-22

Looking for the Income Tax slabs and rates for the financial year 2020-21 or Assessment year 2021-22? This article might help you find out the Income Tax Rates for FY 2020-21.

What is Income tax Slab rates in India?

Indian Income Tax System follows Income Tax slabs for levying the tax on the income of an individual or non-individual. Various slabs are accounted for. 

In India, the income tax is charged on the income earned. This tax applies to the range of income, which is called Income Tax Slabs. The slabs of income tax keep changing from year to year. The Finance Minister announces the slab rates of Income Tax in the Union Budget each year. 

Surcharge (EC) and secondary and higher secondary education cess (SHEC) are also charged over and above the tax.

The income tax slab rate can be mainly bifurcated as under:

• By Gender

• • Male; and
  • Female.
• By Age
  • Resident; and
  • Non-resident in India.
• For Hindu Undivided Family (HUF)/ Association Of Person (AOP)/ Body Of Individual (BOI)/ Artificial Judicial Person (AJP)
• On Non-individuals
  • Partnership Firms or LLPs;
  • Domestic Company;
  • Foreign Company;
  • Co-operative Societies; and
  • Local Authorities.

Income Tax Rates for Individuals as announced in the Budget 2020. 

Income tax rates/slabs for 

• Individual men and women below the age of 60 years

• An HUF

• NRI

• Association of person, Body of Individuals and Artificial Judicial Person:

However, This Tax rate would be optional as the budget 2020 has offered the taxpayers the option to choose between the existing income tax regime (which allows availing existing income tax exemptions and deductions) and a new tax regime with slashed income tax rates and new income tax slabs but no tax exemptions and deductions.

The Tax exemptions and Deductions that will not be entertained in new tax regime are as follows:

Exemptions removed in New Income Tax Regime

• Exemption of up to Rs 1,50,000 lakh under Section 80C for ELSS, NPS, PPF
• Exemption of up to Rs 25,000 under Section 80D for medical insurance premium
• Tax benefits for disability under Section 80DD/80DDB
• Leave travel allowance exemption to salaried employees which could be availed twice in 4 years
• House Rent Allowance to salaried individuals
• Standard deduction of Rs 50,000 to salaried taxpayers
• Entertainment allowance and Professional Tax under Section 16
• Tax benefit on interest on housing loan for a self-occupied or vacant house under Section 24
• Rs 15000 deduction from family pension under Section 57
• Tax rebate of up to Rs 12,500 on income up to Rs 5 lakh under Section 87A
• Deduction of up to Rs 2 lakh on Home Loan interest
• Tax break on interest on education loan under Section 80E
• Tax break on donations to NGOs under section 80G
• Additional deduction of up to Rs 1.5 lakh on Home Loan interest on affordable houses under section 80EEA
• Deduction of up to Rs 1.5 lakh for on Auto Loan interest on the electric vehicle under section 80EEB

Claims under these sections will not be entertained under the new tax regime:

• 80C, 80CCC, 80CCD
• 80D, 80DD, 80DDB
• 80E, 80EE, 80EEA, 80EEB
• 80G, 80GG, 80GGA, 80GGC
• 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA

In Budget 2020 the Union Finance Minister also announced changes to be made in TDS rate chart for FY 2020-21 

The Income Tax slab rates for the remaining category would be the same as last year i.e. Income Tax Slab rate for the FY 2019-20 or AY 2020-21.

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