scorecardresearchBudget 2022: Here are income tax slabs applicable for the assessment year 2022-23

Budget 2022: Here are income tax slabs applicable for the assessment year 2022-23

Updated: 01 Feb 2022, 08:30 AM IST
TL;DR.

Income tax slabs fluctuate with the corresponding change in income. We explain different tax rates applicable in different scenarios for the fiscal 2021-22 – which would continue until the FM decides to change them in the Union Budget 2022-23.

Union Finance Minister Nirmala Sitharaman arriving at the Finance Ministry office. Photo: ANI

Union Finance Minister Nirmala Sitharaman arriving at the Finance Ministry office. Photo: ANI

When most of us are awaiting the Union budget 2022-23 speech with a bated breath, it is only fair to take a look at the tax slabs applicable for individuals falling in different income brackets. It is a foregone conclusion that the income tax payable not only rises with income, but also at the rate at which it is levied.

It is noteworthy to mention that the rate declines slightly for senior citizens, and even steeper for super senior citizens (above the age of 80). On the other hand, those who are super rich with deep pockets earning above 50 lakh per annum are also levied a surcharge, which also understandably rises with a growing income.

Let us take a look at different tax slabs applicable during assessment year 2022-23 (financial year 2021-22) — subject to change unless the Union Finance Minister Nirmala Sitharaman decides to maintain the status quo.

Up to 2.5 lakh, there is no tax payable by individuals. Between 2.5 lakh to 5 lakh, the tax levied is 5 percent. Between 5 lakh to 10 lakh, the tax levied rises to 20 percent. And above 10 lakh, the tax levied rises further to 30 percent.

For senior citizens, the tax rates are almost the same but change according to the income bracket.

For an income up to 3 lakh, there is no tax levied. When the income ranges between 3 lakh to 5 lakh, the tax rate levied is 5 percent. As the income increases to anywhere between 5 lakh to 10 lakh, the tax rate is 20 percent and likewise, it shoots up to 30 percent in case income is above 10 lakh.

At the same time, the tax rates are relatively favourable for super senior citizens (above the age of 80).

For individuals whose income is up to 3 lakh, no tax is payable. When the income ranges between 3 lakh to 5 lakh, the tax levied is 5 percent. For income between 5 lakh to 10 lakh, the tax rate is 20 percent and it rises to 30 percent when the income is above 10 lakh.

The new tax regime: The income tax department gave an option from the assessment year 2021-22 onwards to pay income tax at a lower rate but without availing the benefits of deductions and exemptions. The tax rate is the same for income up to 5 lakh.

It rises to 10 percent (instead of 20 percent) for income up to 7.5 lakh. It further rises to 15 percent (instead of 20) for income between 7.5 to 10 lakh. Then it further jumps to 20 percent (instead of 30) for income between 10 lakh to 12.5 lakh.

The lower tax rate is 25 percent for income between 12.5 lakh to 15 lakh, further rising to 30 percent for income above 15 lakh.

Surcharge for super rich: There is an additional surcharge that is levied on incomes exceeding 50 lakh.

Those whose incomes are between 50 lakh and one crore, there is a 10 percent surcharge. For incomes ranging between one to two crore, the surcharge rises to 15 percent, and further to 25 percent when the income is between 2 crore to 5 crore. The surcharge is 37 percent when the income is more than 5 crore.

Income tax slabs:

I. Individuals:

Income                                      Tax slab

Up to 2.5 lakh:                    NIL

Between 2.5 - 5 lakh:    5 percent

Between 5 - 10 lakh: 20 percent

Above 10 lakh:                   30 percent

 

II. Senior Citizens:

Up to 3 lakh:                             NIL

3 lakh to 5 lakh:                 5 percent

5 lakh to 10 lakh:              20 percent

10 lakh:                                     30 percent

 

III. New regime (without exemptions):

Up to 2.5 lakh:                               NIL

Between 2.5 - 5 lakh:            5%

Between 5 -  7.5 lakh:           10 percent

Between 7.5 -  10 lakh:         15 percent

Between 10  - 12.5 lakh:      20 percent

Between 12.5 - 15 lakh:       25 percent

Above 15 lakh:                       30 percent

First Published: 01 Feb 2022, 08:30 AM IST