Rates of income-tax in respect of income liable to tax for the financial year 2021-22 (AY 2022-23)

In respect of income of all categories of assessee liable to tax for the assessment year 2021-22, the rates of income-tax have either been specified in specific sections (like section 115BAA or section 115BAB for domestic companies, 115BAC for individual/HUF, and 115BAD for cooperative societies) or have been specified in Part I of the First Schedule to the Bill. There is no change proposed in tax rates either in these specific sections or in the First Schedule. The rates provided in sections 115BAA or 115BAB or 115BAC or 115BAD for the assessment year 2021-22 would be the same as already enacted. Similarly, rates laid down in Part III of the First Schedule to the Finance Act, 2020, for the purposes of computation of ―advance tax‖, deduction of tax at source from ―Salaries‖ and charging of tax payable in certain cases for the assessment year 2021-22 would now become part I of the first schedule. Part III would now apply for the assessment year 2022-23 and would remain unchanged except that it would also apply to the proposed section 194P.

Individual, HUF, association of persons, body of individuals, artificial juridical person.

The rates of income-tax in the case of every individual (other than those mentioned in (ii) and (iii) below) or HUF or every association of persons or body of individuals, whether incorporated or not or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Act (not being a case to which any other Paragraph of Part III applies) are as under:—

Taxable IncomeTax Rates
Up to Rs. 2,50,000Nil
Rs. 2,50,001 to Rs.5,00,0005%
Rs. 5,00,001 to Rs.10,00,00020%
Above Rs. 10,00,00030%

In the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time during the previous year,—

Taxable IncomeTax Rates
Up to Rs. 3,00,000Nil
Rs. 3,00,001 to Rs.5,00,0005%
Rs. 5,00,001 to Rs.10,00,00020%
Above Rs. 10,00,00030%

In the case of every individual, being a resident in India, who is of the age of eighty years or more at any time during the previous year,—

Taxable IncomeTax Rates
Up to Rs.5,00,000Nil
Rs. 5,00,001 to Rs.10,00,00020%
Above Rs 10,00,00030%

Tax rates under section 115BAC and section 115BAD— New Scheme

From the assessment year 2021-22 (FY 2020-21), individual and HUF taxpayers have an option to opt for taxation under section 115BAC of the Act and the resident co-operative society has an option to opt for taxation under the newly inserted section 115BAD of the Act.

On satisfaction of certain conditions as per the provisions of section 115BAC, an individual or HUF shall, from the assessment year 2021-22 onwards, have the option to pay tax in respect of the total income at the following rates:

Total Income (Rs)Tax Rate
Upto 2,50,000Nil
From 2,50,001 to 5,00,0005%
From 5,00,001 to 7,50,00010%
From 7,50,001 to 10,00,00015%
From 10,00,001 to 12,50,00020%
From 12,50,001 to 15,00,00025%
Above 15,00,00030%

Similarly, a co-operative society resident in India shall have the option to pay tax at 22 percent for the assessment year 2021-22 onwards as per the provisions of section 115BAD, subject to fulfillment of certain conditions.

is a fellow member of the Institute of Chartered Accountants of India. He lives in Bhubaneswar, India. He writes about personal finance, income tax, goods and services tax (GST), company law and other topics on finance. Follow him on facebook or instagram or twitter.