Income Tax is the money that is levied by the government, it is calculated based on the income of a particular individual for a given financial year and the calculated tax is imposed on the individual, it is the tax that must paid to the government by the peoples of India. Here the individual means the HUFs or Hindu undivided Families, AOP or Association of Persons, BOI or Body of Individuals, Co-operative Societies, Trusts and the artificial judicial person or any, etc. Individual can calculate the Tax by taking into the considerations of the following components like the Income / salary + HRA + Special Allowance + Transport Allowance + any other allowance and the deductions will give you your payable tax for the given financial year. In general, the income tax is the percentage that is the total income earned for a given financial year and minus of the exemptions and deductions with respect to the Income Tax Act. The tax is applied on any individual as per the tax slab system according to their respective annual income. Income tax is directly proportional to the individual income that means the tax increases with the increase int he income of the taxpayer. The rich pays more tax than with the lower income peoples. The income tax slabs are not stable they keep on changing every budget year as per the government revenues. Depending upon the taxation the tax payers are classified into 3 types that is Residents and non-residents less than 60 years, Resident Senior Citizens between the age of 60 to 80 years and Resident Super Senior Citizens above 80 years.
New Regime Income Tax Slab (2020-21):
| Income Tax Slab | Applicable Tax Rates |
|---|---|
| Up to INR 2.5 lakhs | NIL |
| INR 2.5 lakhs to INR 5 lakhs | 5% |
| INR 5 lakhs to INR 7.5 lakhs | 10% |
| INR 7.5 lakhs to INR 10 lakhs | 15% |
| INR 10 lakhs to INR 12.5 lakhs | 20% |
| INR 12.5 lakhs to INR 15 lakhs | 25% |
| Above INR 15 lakhs | 30% |
Note: Terms apply depending on the Income Tax Act