Income Tax Slab Rates: Individual, Senior Citizens (FY 2021-2022)

New Income Tax Slab Rates for FY  2021-2022 (assessment year 2022-2023) has given an option to Individuals or HUF either to continue the normal income tax slab rates or go for special rates of tax for FY. 2021-2022.

In the following, we have completely explained all Slab Rates for FY 2021-2022 for Individuals, HUF, Senior Citizens:

  

What are the Income Tax Slab Rates for FY 2021-22 (AY 2022-23) for individuals below 60 years of age?

Income Tax Slab Rate – FY. 2021-22
For Individual – Below 60 years of age
Total Income (In Rs.)	Option 1 Normal Tax Rate	Option 2 Special Tax Rate
Upto2.5Lacs 2.5–5 Lacs 5–7.5 Lacs 7.5–10 Lacs 10–12.5Lacs 12.5–15Lacs Above15Lacs	Nil 5% 20% 20% 30% 30% 30%	Nil 5% 10% 15% 20% 25% 30%

 

What are the Income Tax Slab Rates for FY 2021-22 (AY 2022-23) for Senior Citizens of age 60 years or more but less than 80 years?

Income Tax Slab Rate – FY. 2021-22
For Senior Citizens – 60 to 80 years of age
Total Income (In Rs.)	Option 1 Normal Tax Rate	Option 2 Special Tax Rate
Upto2.5Lacs 2.5–3 Lacs 3–5 Lacs 5–7.5 Lacs 7.5–10Lacs 10–12.5Lacs 12.5–15Lacs Above15Lacs	Nil Nil 5% 20% 20% 30% 30% 30%	Nil 5% 5% 10% 15% 20% 25% 30%

Also Read: Section194P: Exemption from filing ITR for Senior Citizen

What are the Income Tax Slab Rates for FY 2021-22 (AY 2022-23) for Senior Citizens of age 80 years or more?

Income Tax Slab Rate – FY. 2021-22
For Senior Citizens – Above 80 years of age
Total Income (In Rs.)	Option 1 Normal Tax Rate	Option 2 Special Tax Rate
Upto2.5Lacs 2.5–5 Lacs 5–7.5 Lacs 7.5–10 Lacs 10–12.5Lacs 12.5–15Lacs Above15Lacs	Nil Nil 20% 20% 30% 30% 30%	Nil 5% 10% 15% 20% 25% 30%

 

For calculating Income Tax for financial year 2021-22 (assessment year 2022-23) an individual has the option to either continue to follow normal tax slab rates or go for special tax slab rates.

The same rates and option to choose is also in FY 2020-21. So in Finance Act 2021 there is no change in tax rates, it is the same as of FY 2020-21.

Also Read: HSN Code (6 digits / 8 digits) Mandatory from 1st April 2021

 

Which Income tax slab rates are beneficial (Normal or Special)?

One should calculate tax according to both normal as well as special tax rates and by comparing both you have to decide which is beneficial for you.

 

What is the rate of surcharge for the financial year 2021-22 (AY 2022-23)?

After calculating tax according to the slab rates an additional tax is levied known as surcharge, on income above Rs.50 Lakhs as below:

Income (In Rs.)	Rate of surcharge
Above Rs.50 Lakhs but upto Rs. 1 Crore Above Rs.1 Crore but upto Rs. 2 Crore Above Rs.2 Crore but upto Rs. 5 Crore Above Rs.5 Crore	10% 15% 25% 37%

 

What is the Education Cess for FY. 2021-22 (AY 2022-23)

After the above tax slab rates an additional cess is levied of 4% for health and education cess.

 

What is the Rebate under [Section 87A]?

A resident individual whose total income does not exceed Rs.500000 is eligible for rebate:

The amount of rebate shall be least of the following:

• Tax calculated (before cess) or
• Rs. 12,500

Also Read: Section 44AD of Income Tax Act (Presumptive Taxation Scheme)

 

What are the exemptions and deductions that are not available if you follow the special tax slab rates?

The following are the main exemptions and deductions that the taxpayer will have to forgo if adopt special tax slab rates option for financial year 2021-22:

• Leave travel allowances
• House rent allowances
• Standard deduction of Rs.50,000 to salary tax payer
• Deduction under section 80TTA (Interest on deposit in saving account) and section 80TTB (Interest on deposit for senior citizens)
• Deduction of entertainment allowance (for government employees) and employment / professional tax
• Interest paid on housing loan
• Deduction under section 80C (like investment in PF, NPS, Life Insurance Premium, Home Loan principal payment, Tuition fees etc.)
• Medical Insurance Premium (Section 80D)
• Other special allowances (Section 10(14))
• Conveyance, Helper allowance etc

However, deduction under section 80CCD (2) (Employer contribution to NPS on account of employee) and section 80JJAA can still be claimed.

 

Conclusion

Income Tax Slab Rates for the financial year 2021-22 as per Finance Act 2021 is same as of financial year 2020-21.

Under which Individuals, Senior Citizens are given an option to apply special tax rates which are very lower than normal tax rates, but if you follow special tax rates then you have to forgo certain exemptions and deductions.