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PARTICULARS |
EXTENDED DUE DATE |
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ITR for AY 2021-22 u/s 139(1) whose Due Date is 31.07.2021 |
31.12.2021 |
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ITR for AY 2021-22 u/s 139(1) whose Due Date is 31.10.2021 |
15.02.2022 |
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ITR for AY 2021-22 u/s 139(1) whose Due Date is 30.11.2021 |
28.02.2022 |
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Report of Audit for PY 2020-21 |
15.01.2022 |
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Report from an Accountant by persons entering into international transaction u/s 92E |
31.01.2022 |
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Due Date for furnishing Belated / Revised Return for AY 2021-22 |
31.03.2022 |
INCOME TAX CALCULATION UNDER OLD AND NEW TAX REGIMES
On 13th April 2020, the CBDT issued a circular to employers to obtain a declaration from their employees if they wish to opt for concessional slab rates for FY 2020-21 under the new Income Tax regime for the purpose of TDS deduction under section 192 under the new tax regime. For better understanding, to know the calculation of Income Tax under the Old and New tax regimes for FY 2020-21, and to take the decision whether we can select old tax structure or new tax structure, I am trying to write an article on this. This will be useful for salaried employees relating to India. This article covers the following:
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2. |
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3. |
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4. |
Income Tax Slab rates for FY 2020-21 for very senior citizens |
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5. |
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6. |
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7. |
Income Tax slab rates for FY 2020-21 and AY 2020-21 under the New Tax Regime:
For all individuals:
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Income Tax Slabs |
Tax rate |
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Up to 2,50,000 |
NIL |
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2,50,001 to 5,00,000 |
5% |
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5,00,001 to 7,50,000 |
10% |
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7,50,001 to 10,00,000 |
15% |
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10,00,001 to 12,50,000 |
20% |
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12,50,001 to 15,00,000 |
25% |
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Above 15,00,000 |
30% |
2. Health and Education cess @ 4% will be added to the “Tax payable amount after deduction of rebate u/s 87A".
3. Surcharge is levied on taxable income above Rs50,00,000
4. The individuals who are having taxable income of up to Rs5,00,000 will be eligible for tax rebate u/s 87A up to maximum of Rs12,500, and thereby no need to pay any tax either in old tax regime or new tax regime. (The detailed notes will be there below about sec 87A).
5. Under the new tax regime, the individuals are eligible for only one deduction u/s 80CCD(2) which allows deduction on the employer’s contribution to the National Pension Scheme (NPS) Account for maximum of 10% of the respective employee’s salary (Basic + DA).
6. Deductions and exemption disallowed in the new tax regime:
- Deduction u/s 80C, 80D, 80E, 80G, and 80U, etc. under chapter VI A
- House Rent Allowance (HRA)
- Leave Travel Allowance (LTA), etc. are not available in the new tax regime.
- The deductions and tax exempts under chapter VI A are mentioned below:
7. Eligibility to claim rebate u/s 87A :-
The following conditions should satisfy if we claim the benefit of rebate u/s 87A :-
(a) We should be a resident individual,
(b) Our total taxable income (after deductions, but before calculating Health and Education cess) does not exceed Rs12,500.
Then, we are not required to pay any income tax under the new tax regime:
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Rebate u/s 87A under New tax regime :- |
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Total Taxable income |
Tax payable |
Rebate available u/s 87A |
Tax payable before Health and Education cess calculated |
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260000 |
500 (2,50,001 to 2,60,000) x 5% |
500 |
NIL |
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400000 |
7500 (2,50,001 to 4,00,000) x 5% |
7,500 |
NIL |
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580000 |
28500 (2,50,000 to 5,00,000) x 5% (5,00,001 to 5,80,000) x 15% |
N/A |
24500 (12,500 + 12,000) |
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Income Tax Slab rates for FY 2020-21 under the Old Tax Regime:
Income Tax Slab rates for individuals less than 60 years of age:
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Tax Slab |
Tax rate |
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Up to 2,50,000 |
NIL |
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2,50,001 to 5,00,000 |
5% |
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5,00,000 to 10,00,000 |
20% |
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Above 10,00,000 |
30% |
Income Tax Slab rates for Senior Citizen (Aged 60 years or more but less than 80 years)
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Tax Slab |
Income Tax Rates |
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Upto Rs. 3,00,000 |
NIL |
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Rs. 3,00,000 - Rs. 5,00,000 |
5% |
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Rs. 5,00,000 - Rs. 10,00,000 |
20% |
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Above Rs. 10,00,000 |
30% |
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Surcharge( subject to Marginal Relief ) |
10% (If taxable income > Rs. 50 lacs) |
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15% (If taxable income > Rs. 1 Crore) |
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25% (If taxable income > Rs. 2 Crore) |
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37% (If taxable income > Rs. 5 Crore) |
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Health & Education Cess |
4% of (Income Tax + Surcharge). |
Income Tax Slab rates for Very Senior Citizen (Aged 80 years or more)
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Income Tax Slab |
Income Tax Rates |
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Upto Rs. 5,00,000 |
NIL |
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Rs. 5,00,000 - Rs. 10,00,000 |
20% |
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Above Rs. 10,00,000 |
30% |
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Surcharge( subject to Marginal Relief ) |
10% (If taxable income > Rs. 50 lacs) |
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15% (If taxable income > Rs. 1 Crore) |
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25% (If taxable income > Rs. 2 Crore) |
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37% (If taxable income > Rs. 5 Crore) |
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Health & Education Cess |
4% of (Income Tax + Surcharge). |
• Rebate under Section 87A Rs 12,500 or 100% of income tax (whichever is lower) for individuals with income below Rs 5 Lakhs
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Rebate u/s 87A under Old tax regime :- |
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Total Taxable income |
Tax payable |
Rebate available u/s 87A |
Tax payable before Health and Education cess calculated |
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260000 |
500 (2,50,001 to 2,60,000) x 5% |
500 |
NIL |
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400000 |
7500 (2,50,001 to 4,00,000) x 5% |
7,500 |
NIL |
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580000 |
28500 (2,50,000 to 5,00,000) x 5% (5,00,001 to 5,80,000) x 20% |
N/A |
28500 (12,500 + 16,000) |
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How to calculate Income Tax under New Tax Regime and Old Tax Regime for FY 2020-21?
Example 1:
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Particulars |
Tax Rate |
Old Tax Structure |
New Tax Structure |
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Total income or Gross Salary |
480000 |
480000 |
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Less : Standard deduction |
50000 |
N/A |
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Income after standard deduction |
430000 |
480000 |
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Less : Deductions and Tax exemptions of Chapter VI A |
80000 |
0 |
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Taxable income |
350000 |
480000 |
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Calculation of Tax for Old tax structure:- |
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Up to 2,50,000 |
NIL |
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2,50,001 to 5,00,000 |
5% |
7500 |
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5,00,000 to 10,00,000 |
20% |
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Above 10,00,000 |
30% |
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Calculation of Tax for New Tax structure:- |
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Up to 2,50,000 |
NIL |
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2,50,001 to 5,00,000 |
5% |
11500 |
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5,00,001 to 7,50,000 |
10% |
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7,50,001 to 10,00,000 |
15% |
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10,00,001 to 12,50,000 |
20% |
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12,50,001 to 15,00,000 |
25% |
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Above 15,00,000 |
30% |
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Total Tax amount |
7500 |
11500 |
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Less : Tax rebate u/s 87 A |
7500 |
11500 |
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Total Taxable amount after rebate u/s 87 A |
0 |
0 |
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Add : Health and Education cess |
4% |
N/A |
N/A |
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Total Tax Payable amount to Government |
N/A |
N/A |
Note 1:
The income tax amount of Rs11,500 calculated as below :-
There is a taxable amount under New tax regime is Rs 4,80,000
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On first 2,50,000 |
0% |
0.00 |
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From 2,50,001 to 4,80,000 (i.e. 2,30,000 x 5%) |
5% |
11500.00 |
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11500.00 |
Note 2: Total Taxable amount after rebate u/s 87A is considered zero because both the old and New tax regimes are having the rebate u/s 87A is below Rs12,500 which is under eligible limit.
Example 2:
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Particulars |
Tax Rate |
Old Tax Structure |
New Tax Structure |
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Total income or Gross Salary |
860000 |
860000 |
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Less : Standard deduction |
50000 |
N/A |
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Income after standard deduction |
810000 |
860000 |
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Less : Deductions and Tax exemptions of Chapter VI A |
235000 |
40000 |
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Taxable income |
575000 |
820000 |
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Calculation of Tax for Old tax structure:- |
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Up to 2,50,000 |
NIL |
0 |
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2,50,001 to 5,00,000 |
5% |
12500 |
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5,00,000 to 10,00,000 |
20% |
15000 |
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Above 10,00,000 |
30% |
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Calculation of Tax for New Tax structure:- |
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Up to 2,50,000 |
NIL |
0 |
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2,50,001 to 5,00,000 |
5% |
12500 |
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5,00,001 to 7,50,000 |
10% |
25000 |
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7,50,001 to 10,00,000 |
15% |
10500 |
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10,00,001 to 12,50,000 |
20% |
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12,50,001 to 15,00,000 |
25% |
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Above 15,00,000 |
30% |
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Total Tax amount |
27500 |
48000 |
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Less : Tax rebate u/s 87 A |
0 |
0 |
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Total Taxable amount after rebate u/s 87 A |
27500 |
48000 |
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Add : Health and Education cess |
4% |
1100 |
1920 |
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Total Tax Payable amount to Government |
28600 |
49920 |
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Benefit by choosing old tax regime is Rs. |
21320 |
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Note: The Health and Education cess @ 4% is calculated on “Total taxable amount after rebate u/s 87A".
Example 3:
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Particulars |
Tax Rate |
Old Tax Structure |
New Tax Structure |
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Total income or Gross Salary |
1700000 |
1700000 |
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Less : Standard deduction |
50000 |
N/A |
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Income after standard deduction |
1650000 |
1700000 |
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Less : Deductions and Tax exemptions of Chapter VI A |
210000 |
10000 |
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Taxable income |
1440000 |
1690000 |
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Calculation of Tax for Old tax structure:- |
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Up to 2,50,000 |
NIL |
0 |
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2,50,001 to 5,00,000 |
5% |
12500 |
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5,00,000 to 10,00,000 |
20% |
100000 |
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Above 10,00,000 |
30% |
132000 |
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Calculation of Tax for New Tax structure:- |
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Up to 2,50,000 |
NIL |
0 |
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2,50,001 to 5,00,000 |
5% |
12500 |
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5,00,001 to 7,50,000 |
10% |
25000 |
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7,50,001 to 10,00,000 |
15% |
37500 |
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10,00,001 to 12,50,000 |
20% |
50000 |
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12,50,001 to 15,00,000 |
25% |
62500 |
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Above 15,00,000 |
30% |
57000 |
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Total Tax amount |
244500 |
244500 |
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Less : Tax rebate u/s 87 A |
0 |
0 |
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Total Taxable amount after rebate u/s 87 A |
244500 |
244500 |
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Add : Health and Education cess |
4% |
9780 |
9780 |
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Total Tax Payable amount to Government |
254280 |
254280 |
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Benefit either by choosing old or New tax regime is Rs. |
0 |
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Note:
We understand that the old tax regime is beneficial for us when the below conditions are fulfilled ;-
(a) Total taxable income is more than Rs15,00,000, and
(b) The total deductions and exemptions of the old tax regime are should be more than Rs2,50,000 (including standard deduction), comparing to the deductions under new tax regime which is applicable for only u/s80CCD(2).
If the total taxable income is below Rs15,00,000 then the above said deductions under old tax structure i.e. 2,50,000 gradually decrease, comparing to the deductions under new tax regime which is applicable for only u/s80CCD(2).
Income Tax Slab Rates for Partnership Firm for FY 2020-21
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Particular |
Income Tax |
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Income Tax |
30% |
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Surcharge( subject to Marginal Relief ) |
12% (If taxable income > Rs. 1 Crore) |
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Health & Education Cess |
4% of (Income Tax + Surcharge). |
Income Tax Slab rates for Domestic Companies for FY 2020-21:
• Claiming Exemptions and
• Turnover in 2017-18 upto Rs. 400 crores
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Particular |
Income Tax |
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Income Tax |
25% |
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Surcharge( subject to Marginal Relief ) |
7% (If taxable income > Rs. 1 Crore) |
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12% (If taxable income > Rs. 12 Crore) |
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Health & Education Cess |
4% of (Income Tax + Surcharge). |
• Domestic Company (2) -
• Claiming Exemptions and
• Turnover in 2017-18 exceeding Rs. 400 crores
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Particular |
Income Tax |
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Income Tax |
30% |
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Surcharge( subject to Marginal Relief ) |
7% (If taxable income > Rs. 1 Crore) |
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12% (If taxable income > Rs. 12 Crore) |
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Health & Education Cess |
4% of (Income Tax + Surcharge). |
• Domestic Manufacturing Company (3) –
• NOT Claiming Exemptions
• U/s 155BAA
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Particular |
Income Tax |
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Income Tax |
22% |
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Surcharge |
10% (If taxable income > Rs. 1 Crore) |
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Health & Education Cess |
4% of (Income Tax + Surcharge). |
• Domestic Manufacturing Company (4) –
• NEW Company
• U/s 155BAB
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Particular |
Income Tax |
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Income Tax |
15% |
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Surcharge |
10% (If taxable income > Rs. 1 Crore) |
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Health & Education Cess |
4% of (Income Tax + Surcharge). |
Hope this article gives you basic information to opt the suitable tax structure to pay Income Tax.
CAclubindia
