Income Tax Rates

The Union Budget 2020 introduced a new income tax regime with reduced tax rates for those willing to forego 70 tax-exemptions and deductions under it. This new tax system has been made optional and continues to co-exist with the old one that comprises of three tax rates and various tax exemptions and deductions available to a taxpayer. The new income tax slabs and rates have come into effect from April 1, 2020 for FY 2020-21.

Income tax rates and slabs under new tax regime for FY 2020-2021

Individuals with a net taxable income of up to Rs 5 lakh in a financial year will be able to avail tax rebate of Rs 12,500 under section 87A in both the existing and new tax regimes. Effectively, this means that individual taxpayers with net taxable income of up to Rs 5 lakh will continue to pay zero tax in both the tax regimes.

However, individuals who have opted for the new tax regime would not be able to avail common tax breaks such as deductions under section 80C for maximum of Rs 1.5 lakh by investing in specified instruments, section 80D for medical insurance paid, house rent allowance, leave travel allowance etc.

The Union Budget 2020 introduced a new income tax regime with reduced tax rates for those willing to forego 70 tax-exemptions and deductions under it. This new tax system has been made optional and continues to co-exist with the old one that comprises of three tax rates and various tax exemptions and deductions available to a taxpayer. The new income tax slabs and rates have come into effect from April 1, 2020 for FY 2020-21.

Income tax rates and slabs under new tax regime for FY 2020-21

Here is a look at the latest income tax slabs for FY 2018-19, FY 2019-20 and FY 2020-21:

Income tax slabs for resident individual between 60 and 80 years of age (Senior Citizen) for FY 2019-20, 2020-21

Income tax slabs for resident individual above 80 years of age (Super Senior Citizen) FY 2019-20, 2020-21