Income Tax Above 5 Lakh

Income tax is the tax levied on the income earned by an individual through any source and hence is taxable in the eyes of law if it passes the tax slab category limit. There are many taxes from local to national that are applicable on all levels and considered as one of the major sources of income for the Government of India. Let us walk through what are taxes and its types, offering our prime focus on the Income tax, how deductions are made on income earned, income tax above 5 lakhs keeping in mind the old and new regime.

Read more
Best Tax Saving Plans
  • High Returns

    Get Returns as high as 15%*
  • Zero Capital Gains tax

    unlike 10% in Mutual Funds
  • Save upto Rs 46,800

    in Tax under section 80 C

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Get Instant Tax Receipts
Save upto ₹46,800 in Taxes Under Section 80C
+91
View Plans
Please wait. We Are Processing..
Plans available only for people of Indian origin By clicking on "View Plans" you agree to our Privacy Policy and Terms of use #For a 55 year on investment of 20Lacs #Discount offered by insurance company Tax benefit is subject to changes in tax laws
Get Updates on WhatsApp

What is Tax?

Taxes are considered as an obligatory contribution every individual has to make who earns income in India in any form and falls under the tax slab category. Taxes are collected from the citizens of the country to upgrade the Indian economy and standard of living. They can be applicable only after the State Legislative or the Indian Parliament passes the law.

Types of Taxes

There are 2 types of taxes applicable on the citizens of India, namely:

  • Direct taxes

  • Indirect taxes

  • Other taxes

Both direct taxes and indirect taxes have many sub-categories and different implementations from one another that helps in avoiding double taxation problems.

Apart from the traditional direct and indirect taxes, there are other taxes too that are launched keeping specific agenda in mind by the Government of India. Other taxes are applicable on both direct as well as indirect taxes like Infrastructure Cess, Swachch Bharat Cess Tax, Krishi Kalyan Cess, etc.

Below mentioned are some of the main taxes levied by the Government of India on their citizens.

Taxes
Direct Taxes Indirect Taxes Other Taxes
Income Tax Sales Tax Property Tax
Wealth Tax Goods & Services Tax (GST) Professional Tax
Gift Tax Value Added Tax (VAT) Entertainment Tax
Capital Gains Tax Custom Duty Education Cess
Securities Transaction Tax Coctroi Duty Toll Tax
Corporate Tax Service Tax Registration Fees

Overview of the Tax Slab

Here is the overview of Income Tax Slab Rates for the Financial year 2022 – 2023 (Assessment Year 2023 – 2024). It is important to note that as there were no significant changes made in the Union Budget this year by our Finance Minister, the Income Tax Slab Rates remain unchanged.

  • There is no change in the Income Tax Slab rates

  • Taxpayers continue paying taxes following the previous year’s tax regime

  • Either the Old or the New tax regime can be followed for the payment of tax

  • Tax rebate of up to Rs. 12,500 is offered under Section 87A of the Income Tax Act, 1961

  • Individual earning up to Rs. 5,00,000 does not fall under the tax paying category irrespective of the tax regime followed

  • Once opted for a new tax regime, a taxpayer can never switch back to the old regime in their lifetime

  • If no investments are made throughout the financial year along with income not exceeding Rs. 5,00,000, an individual does not fall under the tax paying category

Sections That Come Under Income Tax

Here is list of sections that fall under the income tax category along with the maximum claims an individual can make while filing the income tax return.

Sections Maximum Claim Limit
80 C Rs. 1,50,000
80 CCC Rs. 1,50,000
80 CCD Rs. 1,50,000
80 CCF Rs. 20,000
80 CCG Regular Citizens: Rs. 25,000
Senior Citizens: Rs. 50,000
80 D Rs. 20,000
80 DD Normal Disability: Rs. 75,000
Severe Disability: Rs. 1,25,000
80 DDB Senior Citizens: Rs. 1 lakh
Other than Senior Citizen: Rs. 40,000
80 E No limit
80 EE Rs. 3 lakhs
80 GG Rs. 2,000 per month
80 GGA Depends on donation
80 GGB Depends on donation
80 GGC Depends on donation
80 IA No limit
80 IAB No limit
80 IB No limit
80 IC No limit
80 ID No limit
80 IE No limit
80 JJA First 5 years profits
80 QQB Rs. 3 lakhs
80 RRB Rs. 3 lakhs
80 TTA Rs 10,000 per year
80 U Normal Disability: Rs. 75,000
Severe Disability: Rs. 1,25,000

New Income Tax Slab Rate Table

New income tax slab rates were introduced in the Financial Year 2020 – 2021. It has given the option to individual taxpayers whether to go for the new income tax regime or continue with the old income tax regime. Here is the table with new tax rates as applicable on the annual income.

Income Tax Slab New Regime Income Tax Slab Rates FY 2020 -2021
(Applicable on All Categories of Individuals & HUF)
Up to Rs. 2.5 Lakhs NIL
Rs. 2.5 lakhs to Rs. 3.00 lakhs 5% (tax rebate u/s 87A is available)
Rs. 3.00 lakhs to Rs. 5.00 lakhs
Rs. 5.00 lakhs to Rs. 7.5 lakhs 10%
Rs. 7.5 lakhs to Rs. 10.00 lakhs 15%
Rs. 10.00 lakhs to Rs. 12.50 lakhs 20%
Rs. 12.5 lakhs to Rs. 15.00 lakhs 25%
Rs. 15 lakhs and above 30%

It Is Important to Know That:

  • New income tax regime is same for all the categories of individuals and HUFs, be it below 60 years or above 80 years of age.

  • Individuals earning equal to or less than Rs. 5 lakhs annually are eligible for tax rebate under Section 87A, making the tax liability NIL.

  • Exemption limit in case of NRIs (Non-Resident Indians) is Rs. 2,50,000 irrespective of the age.

  • 4% health and educational cess is applicable to the income tax liability.

Surcharge

The cess and surcharge on income tax payable are applicable if the total income of the assessee exceeds the below-mentioned limits:

Assessment Year 2022-23
Income Range Surcharge
Above Rs. 50 Lakhs but less than Rs. 1 Crore 10%
Above Rs. 1 Crore but less than Rs. 2 Crores 15%
Above Rs. 2 Crores but less than Rs. 5 Crores 25%
Above Rs. 5 crores but less than Rs. 10 Crores 37%
Above Rs. 10 Crores 37%

Disclaimer: Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.

Example of Income Tax Rate Calculated Under New Regime

Gross Total Income Rs.12 lakh
Deductions under Section 80 and 80CCD NIL
House Rent Allowance (HRA) NIL
Medical and Travel Allowance NIL
Taxable Income Rs.12 lakh
Up to Rs.2.5 lakh NIL
Above Rs.2.50 but less than Rs.5 lakh Rs.12,500
Above Rs.5 lakh but less than Rs.7.50 lakh Rs.25,000
Above Rs.7.50 but less than Rs.10 lakh Rs.37,500
Above Rs.10 lakh but less than Rs.12.50 lakh Rs.40,000
Total Tax Paid Rs.1,15,000

Income Tax Slab Rates: New Tax Regime Vs Old Tax Regime

Income Tax Slab Old Tax Regime for FY 20-21 (AY 21-22) New Tax Regime for FY 20-21 (AY 21-22)
Resident Individuals & HUF less than 60 years & NRIs Resident Individuals & HUF more than 60 but less than 80 years Resident Individuals & HUF above 80 years of age Applicable for All Individuals & HUF
Up to Rs. 2.5 Lakhs NIL NIL NIL NIL
Rs. 2.5 lakhs to Rs. 3.00 lakhs 5% (rebate on tax under Section87A) NIL NIL 5% (rebate on tax under Section87A)
Rs. 3.00 lakhs to Rs. 5.00 lakhs 5% (rebate on tax under Section87A) NIL    
Rs. 5.00 lakhs to Rs. 7.5 lakhs 20% 20% 20% 10%
Rs. 7.5 lakhs to Rs. 10.00 lakhs 20% 20% 20% 15%
Rs. 10.00 lakhs to Rs. 12.50 lakhs 30% 30% 30% 20%
Rs. 12.5 lakhs to Rs. 15.00 lakhs 30% 30% 30% 25%
Rs. 15 lakhs and above 30% 30% 30% 30%

FAQ's

  • Can I invest in more than 1 investment policy and claim Rs. 1,50,000 exemptions each?

    Ans: No. Rs. 1,50,000 is the maximum exemption limit regardless of the number of policies or investments made under Section 80C of the Income Tax Act, 1961.
  • Is donation eligible for tax exemption?

    Ans: Yes, but only specific funds and institution donations are eligible for the exemption of tax under Section 80C of the IT Act.
  • When can I claim my 80C deductions?

    Ans: Deductions under any Section can be claimed during the filing of Income Tax Return at the end of each assessment year.
  • Which investment method should I go for to save taxes?

    Ans: There are many Insurance Policies, Fixed Deposits, Mutual Funds, Public Provident Funds, etc. available in the market which an individual or Hindu Undivided Family (HUF) can opt for to save their taxes. However, keeping in mind factors like personal appetite, age, and assets in hand, is very important before making any kind of investment.
  • How does the government collect taxes?

    Ans: There are 3 ways for Government of India to collect taxes from the citizens, namely:
    • Voluntary payment by visiting any designated bank.
    • TDS, that is, Tax Deduction at the Source. It means tax is deducted directly from the income of the receiver.
    • TCS, that is, Tax Collected at the Source.
Tax Saving Investment
Save Tax Under Section 80C

Income Tax articles

Recent Articles
Popular Articles
Income Tax Above 10 Lakh

10 Jun 2022

Every year on the 1st of February, the Government of India...
Read more
Investment Declaration with Form 12BB

08 Jun 2022

Tax planning is vital for salaried individuals to streamline...
Read more
NPS Tax Savings

08 Jun 2022

NPS or National Pension Scheme is a voluntary pension plan...
Read more
How is Short-Term Capital Gains Tax Calculated on Shares?

08 Jun 2022

Any property or security in your name is a capital asset for...
Read more
How to Save TDS on Interest with Form 15G and 15H?

08 Jun 2022

Fixed deposits are the safest investment vehicles for most...
Read more
Tax Saving Investments
Tax Saving Investments are an integral part of one’s life as they offer tax deductions under section 80C or...
Read more
Cost Inflation Index
We all have read in the school books, never took it seriously as a child, and now it has become the most...
Read more
Gratuity Eligibility Before and After Completion of 5 Years
An employee is a person who is hired by an organization to work in a specific field that they have expertise in...
Read more
SBI PPF Calculator
Public Provident Fund or PPF is a complete Government-backed investment scheme offered to all individuals, both...
Read more
PPF Calculator - How to Calculate PPF
PPF manages to sound like a very complicated term but is not, it’s rather simply known as Public Provident Fund...
Read more
top
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL