Income tax slab rates in India for FY 2021-22 and 2022-23

No change has been proposed in the income tax slabs and rates (both old and new tax regimes) in the Union Budget 2022. The income tax slabs and rates have been kept unchanged from the financial year (FY) 2020-21. For FY 2021-22 and 2022-21, individual taxpayers will continue to choose between two tax regimes - the existing or old tax regime and the new, concessional one. Old tax regime allows the taxpayer to continue with existing tax exemptions such as House Rent Allowance (HRA), Leave Travel Allowance (LTA) and deductions under different sections of the Income-tax Act, 1961. While those opting for the new regime will have to forego most of the (approximately 70) tax exemptions and deductions that are available under the old regime.

With regards to income tax slabs, old regime has higher tax rates and three tax slabs, whereas the new regime has lower tax rates and six tax slabs.

Here is a look at the latest income tax slabs and rates for FY 2021-22 and FY 2022-23. We will be comparing income tax rates and slabs under the new and old tax regimes for individuals, senior citizens, super senior citizens for FY 2021-22 and FY 2022-23 (Effective from April 1, 2022).

The left-hand side of the table given below shows the old tax regime which comes with deductions and tax exemptions. The right-hand side of the table shows rates in the new tax regime without any tax exemptions and deductions.

Income tax slabs for resident individual below 60 years of age, non-resident individuals (NRI) irrespective of age and HUFs

Income tax slabs for resident individual age above 60 years but below 80 years (senior citizen)

Income tax slabs for resident individual age above 80 years (Super senior citizen)

Applicable for all individual tax payers:

• Rebate of up to Rs 12,500 is available under section 87A under both tax regimes. Thus, no income tax is payable for total taxable income up to Rs 5 lakh in both tax regimes.
• Rebate under section 87A is not available for NRIs and Hindu Undivided Families (HUF)
• Cess at the rate of 4% is applicable on the income tax amount.
• Surcharge at different rates on the income tax is applicable before the levy of cess if the total income exceeds Rs 50 lakh in a financial year.

Abhishek Soni, CEO, Tax2win.in, an ITR filing website says, "If senior citizens or super senior citizens are opting for new tax regime then the benefit of higher exemption limit will not be available, i.e., limit of higher exemption of Rs 3 lakh in case of senior citizens and Rs 5 lakh in case of super senior citizens will not be available under the new optional regime. Therefore, under the new tax regime, basic exemption limit will remain Rs 2.5 lakh for all taxpayers."

Under the existing tax regime, the basic tax exemption limit for an individual depends on their age and residential status. According to their age, resident individual taxpayers are divided into three categories:

1. Resident individuals below the age of 60 years
2. Resident senior citizens aged 60 years or above but below 80 years
3. Resident super senior citizens who are 80 years or above

Do keep in mind that only individuals having no business income in a financial year are eligible to choose between both the tax regimes every year. Thus, such an individual can choose the old tax regime in one year and new tax regime in the next year. However, those having business income, once they have opted for the new tax regime, cannot choose between both the tax regimes every financial year. They have only once in a lifetime opportunity to switch back to the old tax regime.

As mentioned above, even the surcharge is levied on the income tax amount if the total income crosses a certain level. Given below is the table showing surcharges that will be levied.

1. How is tax liability calculated?
   The tax liability is calculated on the income arrived at after availing all the deductions and other tax-exemptions available to the individual.
2. How to calculate total income?
   To calculate your total income, you must add the income received from various sources such as salary, pension, interest received from fixed deposit, recurring deposit, savings account and so on.
3. How do I know my tax payment details?
   Once the tax is deposited by you or any other individual has deducted tax and deposited with the government on your behalf, then total amount of tax deposited against your PAN will be reflected in Form 26AS. You can download the statement from your account on the income tax e-filing website.
4. How can I pay taxes?
   A taxpayer can pay tax offline or online. For offline method, an individual is required to visit the bank branch and pay the tax due along with duly filled challan. Another way is paying taxes online using Net banking facility of any of the authorised banks.
5. What is the difference between the new and old tax regime?
   The new tax regime offers lower, concessional income tax rates without any commonly availed tax deductions and exemptions. In the existing/ old tax regime, an individual can continue to claim tax deductions and exemptions at the existing tax rates and slabs.
6. What is the tax exemption for senior and super senior citizens in old and new tax regimes?
   In the old tax regime, the basic tax exemption is based on the age of an individual. For senior citizens aged above 60 years but below 80 years, exemption limit is Rs 3 lakh. For super senior citizens aged above 80 years, exemption limit is Rs 5 lakh. In the new tax regime, the exemption is same for every individual, i.e., Rs 2.5 lakh irrespective of his/her age.
7. Is a salaried individual required to choose tax regime for every financial year?
   A taxpayer not having business income will have to choose between new and old tax regime every financial year.