What are the Latest Income Tax Slab Rates FY 2020-21 (AY 2021-22) after Budget 2020? Is there any changes to applicable tax rates for individuals? Let us see the details.
Therefore, covered the Budget 2020 related posts and you may refer them for your better understanding.
In this post, my concentration is to share with you about the Latest Income Tax Slab Rates FY 2020-21 (AY 2021-22) and applicable Security Transaction Tax (STT).
The difference between Gross Income and Total Income or Taxable Income?
In other words, jumping into Latest Income Tax Slab Rates FY 2020-21 (AY 2021-22), first understand the difference between Gross Income and Total Income.
Many of us have the confusion of understanding what is Gross Income and what is Total Income or Taxable Income. Also, we calculate the income tax on Gross Income. This is completely wrong. However, the income tax will be chargeable on Total Income. Hence, it is very much important to understand the difference.
Gross Total Income means total income under the heads of Salaries, Income from house property, Profits and gains of business or profession, Capital Gains or income from other sources before making any deductions under Sections.80C to 80U.
For instance, total Income or Taxable Income means Gross Total Income reduced by the amount of permissible as deductions under Sec.80C to 80U.
Therefore your Total Income or Taxable Income will always be less than the Gross Total Income.
The main feature of this Excel Utility:-
1) Prepare At time 50 Employees Excel Based Form 16 Part B ( Modified Format of Form 16 Part B Vide CBDT Notification No.36/2019 Dated 12/04/2019 ]
2) All the Amended Income Tax Section have in this utility as per Budget 2019
3) You can print individual Form 16 Part B
4) Most easy to install just like an Excel File
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6) Automatic Convert the Amount to the In-Words
Latest Income Tax Slab Rates FY 2020-21 (AY 2021-22)
The government now confused individual taxpayers. Earlier individuals used to worry only about finding ways to tax and invest accordingly. Now they have to find the ways which tax slabs they have to use.
Above all, in one way Government is forcing us to SAVE more. However, with this new change, I think the Government is more concerned with making us to SPEND more.
There will be two types of tax slabs.
1. For those who wish to claim IT Deductions and Exemptions.
2. For those who DO NOT wish to claim IT Deductions and Exemptions.
In addition, explain both the slabs as below.
After that, if you wish to choose the new tax regime, then you have to forget the below deductions or exemptions.
(i) Leave travel concession as contained in clause (5) of
(ii) House rent allowance as contained in clause (13A) of section 10;
(iii) Some of the allowance as contained in clause (14) of section 10;
(iv) Allowances to MPs/MLAs as contained in clause (17) of section 10;
(v) Allowance for income of minor as contained in clause (32) of section 10;
(vi) Exemption for SEZ unit contained in section 10AA;
(vii) Standard deduction, deduction for entertainment allowance and employment/professional tax as contained in
(viii) Interest under section 24 in respect of self-occupied or vacant property referred to in sub-section (2) of section 23.
(Loss under the head income from house property for rented house shall not be allowed to be set off under any
other head and would be allowed to be carried forward as per extant law);
(ix) Additional deprecation under clause (iia) of sub-section (1) of section 32;
(x) Deductions under section 32AD, 33AB, 33ABA;
(xi) Various deduction for donation for or expenditure on scientific research contained in sub-clause (ii) or sub-clause
(iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35;
(xii) Deduction under section 35AD or section 35CCC;
(xiii) Deduction from family pension under clause (iia) of section 57;
(xiv) Any deduction under chapter VIA (like section 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA,
80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc).
Which one to use for the highest tax benefits?
It is not yet clear and hence it is hard for me to say anything BLINDLY. However, going by changes, Similarly, I assume it changes from individual to individuals. Hence, you have to calculate on your own and adopt the one which is more beneficial for you.
CONFUSING RIGHT? YES, as per me, this new tax slab regime is the most complicated tax slab rate any government introduced. Now many individuals will be in a dilemma of which one to use, the ADDITIONAL one along with the existing headache for taxpayers of HOW TO SAVE MORE TAX.
Note: – Along with the applicable taxes, you have to additional surcharges at below rates.
· 10% surcharge on income tax if the total income exceeds Rs.50 Lakhs but below Rs.1 Cr.
· 15% surcharge on income tax if the total income exceeds Rs.1 Cr.
· Health and Education cess : 4% cess on income tax including surcharge. This Health and Education Cess replaced the earlier 2% Education Cess and 1% Secondary and Higher Education Cess from Budget 2018.
In conclusion, once you adopt the new tax slab by not using any deductions or exemptions, you are just forgoing the tax saving part of these schemes. However, the interest earned and maturity amount will remain tax free for you as it was earlier.