The old tax regime for resident individuals and HUFs between the ages of 60 and 80 The old tax regime for resident individuals and Hindu Undivided Families (HUFs), and non-resident Indians under the age of 60 This table shows the difference in the old and new tax regime for each category of individuals: What are the differences in income tax rates for each tax slab in the new and old regime? However, if one continues using the older tax regime (higher of the two), they can use tax deductions while filing their tax return. While the new regime offers lower income tax rates, it does not allow individuals to use the power of income tax deductions to lower their tax liability. However, the older regime was not entirely removed.Īs per the new rules and regulations, people can choose between either of the two tax regimes. In the budget of 2020, a new tax regime was announced. This rate is decided by the government and announced each year in the annual budget. The income tax rate refers to the percentage that is charged on the income of an individual. Resident super senior citizens over the age of 80.Resident senior citizens between the ages of 60 and 80.Resident and non-resident individual taxpayers who are under the age of 60.Income tax slabs also differ as per the category of taxpayers. As taxpayers move up the ladder with a higher income, the tax percentage levied on their earnings also increases. The lower the income, the lower is the percentage of tax paid. These are decided as per the income group that they come under. The government uses these funds to carry out developmental activities, such as making roads, ensuring rural development, covering the salaries of government employees, etc.Īs mentioned above, the Government of India uses income tax slabs for every taxpayer. The tax is collected each year either at source in the form of Tax Deducted at Source (TDS) or advance tax or paid at the time of filing an income tax return (ITR). The government also uses unique income tax slabs and offers relevant tax benefits like exemptions and deductions to people from different professions and income groups under this act. There are a total of 23 chapters and 298 sections in the act. This act primarily oversees the collection and administration of income tax by the government. The Income Tax Act of 1961 was implemented in the country on April 1, 1962.
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