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As per Indian tax laws, income taxes vary based on the income. The government has created different income tax slabs to facilitate this differentiation.
Income tax slabs refer to different levels of income and their different tax liabilities. Income tax slabs are applicable for nearly all types of taxpayers such as individuals, Hindu Undivided Families (HUFs), Association of Persons (AOPs), Body of Individuals (BOIs), and co-operative societies.
For individuals, HUFs, AOPs, BOIs there are four income tax slabs. The first slab is of income up to ₹250,000, which is exempted from tax. Let us look at the four tax slabs below.
| Income | Tax Payable |
|---|---|
| Below 250,000 | No tax |
| Between 2,50,000 and 5,00,000 | 10% of income |
| Between 5,00,001 and 10,00,000 | 20% of income |
| Above 10,00,001 | 30% of income |
An individual has an income of ₹700,000. His income up to ₹250,000 is exempted from tax. He has to pay a 10% tax on his income between ₹250,000 and ₹500,000, which works out to a tax of ₹25,000. Moreover, for the income above ₹500,000 he has to pay tax of 20% or ₹40,000. So based on these different income tax slabs, the total tax payable is ₹65,000.
For senior citizens between age 60 and 80, there are four slabs. When compared to general individuals, the only change for senior citizens is that there is no tax until their income crosses ₹300,000.
| Income | Tax Payable |
|---|---|
| Below 300,000 | No tax |
| Between 3,00,000 and 5,00,000 | 10% of income |
| Between 5,00,001 and 10,00,000 | 20% of income |
| Above 10,00,001 | 30% of income |
For super senior citizens who are above the age of 80, there are three slabs. Super senior citizens are exempt from paying tax until their income exceeds ₹5,00,000.
| Income | Tax Payable |
|---|---|
| Below 500,000 | No tax |
| Between 5,00,000 and 10,00,000 | 20% of income |
| Above 10,00,001 | 30% of income |
For co-operative societies, there are three slabs for calculating income tax. For income up to ₹10,000, a co-operative society has to pay 10% tax. For income between ₹10,000 and ₹20,000, the tax rate for a co-operative society is 20%, and the third slab is for income above ₹20,000 with a tax of 30%.
To summarize, your income is not calculated at a flat tax rate. Use our tax calculator to get an accurate tax payable amount. You need to enter your gross income, without worrying about different tax slabs, and our calculator will give you the exact tax payable.
In the year 1970-71, India had 11 tax slabs, and the highest tax rate was 93.5%.