It is crucial for individuals to be aware of the tax implications under the old tax regime, especially for those under 60 years of age.
Currently, the country operates under two tax systems: the old tax regime and the new tax regime.
While the new tax regime offers tax exemptions up to an annual income of Rs 7 lakh,
individuals do not receive benefits on other investments apart from the standard deduction.
However, in the old tax regime, tax slabs differ slightly, and individuals can avail exemptions on investments. Here are some key points to know about the old tax regime.
For Individuals Below 60 Years:
Under the old tax regime, different tax slabs apply for individuals below 60 years of age. No tax is applicable for an annual income up to Rs 2.5 lakh.
Income between Rs 2.5 lakh to Rs 5 lakh is taxed at 5%. An annual income between Rs 5 lakh to Rs 10 lakh attracts a 20% tax rate. Any income above Rs 10 lakh is taxed at a rate of 30%.
For Individuals Between 60 to 80 Years:
If taxpayers fall within the age range of 60 to 80 years and choose to file their taxes under the old tax regime, the following tax slabs apply:
No tax needs to be paid on an annual income up to Rs 3 lakh. An income between Rs 3 lakh to Rs 5 lakh is taxed at 5%.
An income between Rs 5 lakh to Rs 10 lakh is taxed at 20%. Any income exceeding Rs 10 lakh annually is subject to a 30% tax rate.
For Individuals Above 80 Years:
Individuals above 80 years of age, filing their income tax return (ITR) under the old tax regime, have the following tax slabs:
No tax is applicable on an annual income of up to Rs 5 lakh. An income between Rs 5 lakh to Rs 10 lakh is taxed at 20%. Any income above Rs 10 lakh attracts a 30% tax rate.
Understanding the tax slabs based on age categories is crucial for individuals to accurately calculate their tax liability and effectively plan their finances.
