tax slabs

What are the Different Tax Slabs in India?

PUBLISHED ON: Mar 10 2023
PUBLISHED IN: ITR File

Taxation is the fundamental system that enables a country’s economy; India is no exception to this rule. Here, one of the most important systems in taxation is the tax slab system, which allows the government to clearly define different categories and levels of tax that would be applied to people with different income levels. The tax slabs in India are based on the system known as progressive taxation, which states that the percentage of tax an individual must pay increases when their income increases. Therefore, it divides the taxpayers into different groups and applies different tax rates to each group. In India, the tax slab system is determined by the CBDT, which also reviews and revises the tax slabs each fiscal year. If you want to know about this system and how it benefits the country, follow along as we go over the Indian tax slab system in detail.

 

What is Taxable Income in India?

Taxable income in India is the total income that is earned by an individual or organization during a given financial year, minus the deductibles and exemptions. The taxable income can be from any income source, including an individual’s monthly salary, business or self-employment earnings, capital gains, interest gains, and even rent. Under the Indian Income Tax Act 1961, the appropriate laws for income tax have been laid down, including various tax slabs in India.

 

Is the Due Date for Filing the Same for All Taxpayers?

 

 

No, the due date for filing isn’t the same for all taxpayers as it, in fact, depends on the particular tax slab category of the taxpayer. For instance, the due date for individuals and Hindu Undivided Families, the due date for income tax returns filing is the 31st of July of each assessment year. However, in the case of companies and firms, the date is the 30th of September. Similarly, taxpayers who are getting their accounts audited also have to file their income tax returns by the 30th of September of the assessment year.

 

What is the Time Period Considered for the Purposes of Income Tax?

The usual time period considered for income tax in India is the financial year which commences on April 1st and concludes on March 31st. The taxable income earned during this period is considered while computing the income tax liability of the individual or organization.

 

Which Occupations are Exempted from Income Tax?

As per the tax slabs in India, there are certain occupations which are exempted from paying income tax. One of the primary examples of this is agriculture; however, this exemption is only up to a certain limit of the taxable income. Another great example of tax exemption in India is the income earned by an individual who is a member of a cooperative society. Moreover, the income earned by certain professionals such as doctors, engineers, and architects is eligible for certain exemptions in income tax and up to a certain limit.

 

 

Tax Slabs in India for Individuals

 

The tax slab system divides the categories of individuals as per their age as follows:

Individuals Up To 60 Years of Age and HUF

As per the tax slabs in India, citizens up to 60 years of age are exempt from paying taxes on taxable income up to 2.5 lakh during the financial year.

Income Tax

<= 2.5 Lakhs 0

2.5 Lakhs – 5 Lakhs 5%

5 Lakhs – 10 Lakhs 20%

>  10 Lakhs 30%

  1. Senior Citizens of age between 60 to 80 Years and HUF

The tax slabs in India for senior citizens between the ages of 60- and 80 years state that any taxable income up to 3 lakhs during a given financial year would be exempt from taxes.

Income Tax

<= 2.5 Lakhs 0

2.5 Lakhs – 5 Lakhs 5%

5 Lakhs – 10 Lakhs 20%

>  10 Lakhs 30%

  1. Senior Citizens Beyond 80 Years of Age and HUF

In the case of very senior citizens (80 years and above), the exempted income threshold increases to 5 lakhs during a given financial year.

Income Tax

<= 2.5 Lakhs 0

2.5 Lakhs – 5 Lakhs 5%

5 Lakhs – 10 Lakhs 20%

>  10 Lakhs 30%

 

Final Thoughts

In conclusion, the Indian tax slab system is incorporated to assist individuals with lower income levels while still benefiting the country based on income tax. If you would like a professional to assist you in filing your taxes during any assessment year, feel free to get in touch with Lawgical India. Our legal and financial experts are there to help you sort out your taxes and help you save with deductions and returns.

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