Budget 2022: Income tax slabs for FY 2022-23 in India
The finance minister Nirmala Sitharaman did not announce any change in the tax slabs or rates in her Budget 2022. This dashes the high hopes of the hardworking salaried taxpayer. Thus, with no change in the income tax rates and slabs, an individual taxpayer will continue to have the same tax rates depending on the tax regime that will be chosen for FY 2022-23. The FY 2022-23 will start from April 1, 2022.
Effective from April 1, 2020, an individual salaried taxpayer has been given the option to continue with the old tax regime and avail deductions/tax exemptions such section 80C, 80D deductions, HRA, LTA tax exemptions etc. or to opt for the new tax regime and forgoing approximately 70 deductions and tax exemptions. The new tax regime offers lower tax rates as compared to the old tax regime.
Under both income tax regimes, tax rebate of up to Rs 12,500 is available to an individual taxpayer under section 87A of the Income-tax Act, 1961. This would effectively mean that individuals having net taxable income of up to Rs 5 lakh would not pay any income tax irrespective of the tax regime chose by them.
Another thing to keep in mind is that under the old income tax regime, basic tax exemption limit for an individual taxpayer depends on their age and residential status. However, in the new tax regime, the basic exemption limit is Rs 2.5 lakh in a financial year.
Here is a look at income tax rates and slabs under both the old and new tax regimes.
Tax slabs and rates for resident individuals above 60 years of age but below 80 years of age (Senior citizen)
Income tax slabs and rates for resident individual age above 80 years (Super senior citizen)
A cess at the rate of 4 per cent is added on the income tax amount. Further, surcharge is levied at different income tax rates if the total income exceeds Rs 50 lakh in a financial year.
Surcharge is levied as follows:
Do keep in mind that individuals having business income can opt for new tax regime. However, once opted they get one opportunity in their lifetime to switch back to the old tax regime.
