According to the laws and rules, the particular taxpayer and residents along with non-residents are divided into 3 categories: those below 60 years of age, senior citizens (60-80 years) and super senior citizens (above 80 years)
An individual whose income is more than Rs 2.5 lakh or more possesses compulsory to return ITR. There is a limit of Rs 3 lakh For senior citizens (people between 60 years and 80 years of age), and a limit is Rs 5 lakh for many senior citizens (aged above 80 years).
There are different income tax rates slabs for every type of taxpayer. As of now, there are 2 tax schemes on the tax platform. From the Fiscal year 2020-21 the after the announcement of budget 2020 a new tax scheme providing assessee with a choice to pay the taxes. The latest tax policy becomes optional and proceeds to co-exist with the traditional ones.
Below are the income tax slabs for the new tax scheme
| Income tax slab | Tax rates |
|---|---|
| Up to Rs 2.5 lakh | NIL |
| Rs 2.5 lakh to Rs 5 lakh | 5% tax rebate of Rs 12,500 available under section 87A |
| Rs 5 lakh to Rs 7.5 lakh | 10% |
| Rs 7 lakh to Rs 10 lakh | 15% |
| Rs 10 lakh to Rs 12.5 lakh | 20% |
| Rs 12.5 lakh to Rs 15 lakh | 25% |
| Rs 15 lakh and above | 30% |
According to the old tax scheme if the total income of a person does not exceed Rs 2.5 lakh then the tax rate will not be imposed. But if income is between Rs 2.5 lakh-Rs 5 lakh, then 5% income tax is liable. Under Section 87A of the Income Tax Act,1961 whose income is Rs, 5 lakh can claim compensation of Rs 12,500.
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