INCOME TAX INTRODUCTION

Introduction:

            Income tax is a direct tax that a government levies on the income of every citizens. The Income Tax Act 1961, mandates that the central government collect this tax. Income tax is used to fund public services, pay government obligations, and provide goods for citizens. An income is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them is called Taxable income.

Residential status

The residential status of individuals is determined independently for each tax year and ascertained on the basis of their physical presence in India during the relevant tax year and past years.

If the assets fulfils any one of the following two conditions:

        • If he stays in India for a period of 182 days or more during the previous year Or

        • If he stays in India for a period of 60 days in the previous year and 365 days or more in four  preceding the previous year .

If he doesn’t satisfy the above condition he is non-resident.

Income Slab rate

Income tax slab rate for Old Tax regime -FY 2020-21:

 A) For Individual aged below 60 years & HUF:

Income Slab rate

0-Rs.2.5 Lakhs - Nil

Rs.2.5 lakh - Rs. 5Lakhs - 5%

Rs.5 .00 lakh - Rs.10 lakhs - 20%

Above Rs.10.00 lakh - 30%

B)For Senior citizens aged (Above 60 Years and Less than 80 Years):

Income Slab rate

 0- Rs.3 - lakh Nil

Rs.3 lakh - Rs.5 lakh - 5%

Rs.5 lakh - Rs.10 lakh - 20%

Above Rs.10 Lakh - 30%

C)For Individual aged Super senior (more than 80 years):

Income Slab rate

Rs.5 lakh – Rs.10 Lakh -   20%

Above Rs.10 Lakh -  30%