Income Tax (2020-21) – Online calculator to help you in choosing the best option suitable for you. As per the amendments proposed on Income Tax 2020, in the latest budget of Nirmala Sitharaman, you are given two options to choose from as far as income tax rate calculation is concerned.
- Reduced tax rates (but you will have to forego most of the rebates and exemptions you were already enjoying.)
- Higher tax rates – with rebates and exemptions.
So naturally, you could get confused about the option you should choose for minimizing the tax amount. Use the online calculator provided below to find out the option for you.
Income Tax 2020- Option Selection Calculator
Income Tax slabs - Old scheme vs New proposed scheme
|Income Tax Slabs And Rates (FY – 2018-19) (AY 2019-20) www.insurancefunda.in|
|Income||Up to 59 years of age||60 to 79 years of age||Age 80 and above|
|0 – 2.5 lakhs||Nil||Nil||Nil|
|2.5 – 3 lakhs||5% of income above 2.5 lakhs||Nil||Nil|
|3 – 5 lakhs||2500 + 5% of income above 3 lakhs||5% of Income above 3 lakhs||Nil|
|5 – 10 lakhs||12500 + 20% of income above 5 lakhs||10000 + 20% of income above 5 lakhs||20% of income above 5 lakhs|
|Above 10 lakh||112500 + 30% of income above 10 lakhs||110000 + 30% of income above 10 lakhs||100000 + 30% of income above 10 lakhs|
|If income is above 50 lakhs 10 % of tax as surcharge|
|If income is above 1 crore 15 % of tax as surcharge|
|Educational Cess at the rate of 4% has to be paid on tax + surcharge|
|Tax slabs under new optional regime|
|Total Income(Rs.)||Simplified optional tax rate|
|Up to 2.5 lakh||Nil|
|Rs. 2,50,001 to 5,00,000||5%|
|Rs. 5,00,001 to 7,50,000||10%|
|Rs. 7,50,001 to 10,00,000||15%|
|Rs. 10,00,001 to 12,50,000||20%|
|Rs. 12,50,001 to 15,00,000||25%|
|If Income is above 50 lakhs 10% of tax as surcharge|
|if income is above 1 crore 15% of tax as surcharge|
|Educational cess at the rate of 4% has to be paid on tax + surcharge|
Highlights of the new tax regime
- The income tax 2020, related proposals will come into effect from the financial year 2020-21
- The new tax regime is optional and the individuals who opt to claim available exemptions and deductions would be taxed as per existing rates.
- Companies need not pay dividend distribution tax (DDT) and the dividend will get taxed in the hands of the recipients at applicable rates.
- The timeline for an additional deduction of Rs 1,50,000 made available in the financial act 2019 for home loans sanctioned between 1 April 2019 to 31 March 2020 has been extended to loan sanctioned up to 31 March 2021
Anish L J is a ‘Financial Planner’ and member of Chartered Insurance Institute(CII), London and Insurance Institute of India. He is also a finance, insurance and software consultant. He thoroughly follows the developments in finance, insurance, and other related sectors.