New and Old Income tax rates on annual income 10 to 20 lakhs
Two slab options of income tax have been given to taxpayers by the Modi government. The new one slab and the old one slab. Significantly, the new option has lower tax rates, but in this taxpayers have been deprived of all exemptions. Taxpayers who want to get the benefit of deduction and tax exemption should choose the old tax option.
15% tax on income from 7.5 to 10 lakhs
If a person’s salary or income is Rs 2.5 lakh, then the person is tax-free by the government. It is the same in both old and new systems. At the same time, for an income between Rs 2.5 lakh to 5 lakh has to pay 5 per cent tax. For an income between Rs 5 lakh and Rs 7.5 lakh has to pay 10 per cent tax. Those whose income is from 7.5 lakh to 10 lakh rupees will have to pay 15 per cent tax.
30% tax for income over 15 lakhs
Those who earn Rs 10 lakh to Rs 12.5 lakh annually will have to pay 20 per cent tax. The government has imposed 25 per cent tax on income from Rs 12.5 lakh to Rs 15 lakh and 30 per cent tax has been imposed on those whose income is more than Rs 15 lakh.
New and old rates of income tax
Income (Rs) New rate Old rate
No tax up to Rs 2.5 lakh No tax No tax
2.5 Lakh – 5 Lakh 5% 5%
5 lakh – 7.5 lakh 10% 20%
7.5 lakh – 10 lakh 15% 20%
10 lakh – 12.5 lakh 20% 30%
12.5 lakh – 15 lakh 25% 30%
Above 15 lakhs 30% 30%
What is income tax?
The tax that the central government collects on your annual income is called income tax. It is charged at a different rate according to an income of every person. This income tax is charged as a corporate tax on business entities.
How to calculate income tax?
It is important to add the amount of investment made according to Section 80C to 80U of the Income Tax Act. After this, add the basic amount of tax exemption to it. After this, deduct this amount from the total income. After this, you have to pay income tax according to the current tax slab applicable on the amount left.