Union Budget 2021: A look at the current income tax slabs and rates
New Delhi | Jagran Business Desk: Finance Minister Nirmala Sitharaman will present union budget 2021 today in the Lok Sabha amid daunting economic challenges posed by the COVID-19 pandemic. It remains to be seen whether the Centre would revise the existing tax slabs for the different income groups this year.
The Finance Ministry had provided massive relief to salaried and middle-class last year by introducing new tax slabs. Experts, however, believe that the Centre would keep these slabs intact, this year, though enhance the Income Tax deduction limit under section 80C of the IT act from the current Rs 1.5 lakhs to Rs 2.5- 3 lakhs in the forthcoming budget. Ahead of the budget presentation, here's all you need to know about the current tax slabs.
Under the existing slabs, which came into effect from April 1, 2020, for the Financial year 2020-21, a person earning up to Rs 2.5 lakh annually is exempted from paying tax. Those earning between 2.5 lakh and 5 lakh have to pay 5 per cent of their income in tax, while the individuals falling under the income bracket of Rs 5 lakh to Rs 7.5 lakh have to pay 10 per cent of their earnings in tax. Those earning between 7.5 lakh and 10 lakh are taxed 15 per cent, and so the rate increases by five per cent further on with the increase in the income by up to 2.5 lakh.
The table below shows existing tax slabs for different income groups.
|Total Income (in Rs, PA)||Income Tax Rate|
|Up to Rs 2.5 lakh||Nil|
|From Rs 2,50,001 to Rs 5,00,000||5%|
|From Rs 5,00,001 to Rs 7,50,000||10%|
|From Rs 7,50,001 to Rs 10,00,000||15%|
|From Rs 10,00,001 to Rs 12,50,000||20%|
|From Rs 12,50,001 to Rs 15,00,000||25%|
|Above Rs 15,00,000||30%|
Individuals who earn up to Rs 5 lakh can avail tax rebate of Rs 12,500 under section 87A of the IT Act. This effectively means that those earning up to Rs 5 lakh do not have to pay any tax at all.
The individual taxpayers fall under three categories: Those aged below 60 years, senior citizens aged between 60 years and 80 years, and the super senior citizens aged above 80 years.
Posted By: Lakshay Raja