As earning employees, one of our responsibilities towards the government is to contribute a portion of our income in the form of taxes, commonly referred to as income tax. These taxes take a major part in funding social infrastructures, welfare programs, and various other government schemes. Tax laws are periodically updated and amended in order to enhance fairness, efficiency, and merge with economic conditions.
Recently the Ministry of Finance has made new amendments relating to The Income-tax (Sixth Amendment) Rules, 2023. Which applies to those who are government employees, private employees as well as business men. Earning more than Rs. 3,00,000/- per annum. Whereas there will be some exemptions for the senior citizens and super senior citizens that exceeds around Rs. 5,00,000/-.
Income-tax (Sixth Amendment) Rules, 2023 :
Income-tax (Sixth Amendment) Rules, 2023 cut-off and eligibility :
The income tax is levied upon the individuals based upon their earning capacities and gross income per year. There are some litigations based on which the sum amount of tax varies from one to another. According to the income tax rules, one should pay around 10% tax if his/her income exceeds more than Rs. 50,00,000/-. Followed by 15% for income more than 1 crore, 25% for more than 2 crore. And 37% for more than 5 crores per year.
New income tax slab for 2023-24 :
These are some new changes in taxation that were brought by the Indian government under the Ministry of Finance. Here it involves three categories. Taxation rates for the people who are below 60 years. The senior citizens who are 60 and more than 60 years. And finally the super senior citizens who crossed 80 years. Just have a look at the below table for much better understanding.
Age-related income tax percentages for those under 60 :
Age-related income tax percentages for those over 60 :
Those 80 and older are taxed at the following rates :
Here’s a method to calculate your income tax upon your income per year without relying on online applications or tools. These steps enable you to determine your tax liability based on your annual income as per Income-tax (Sixth Amendment) Rules, 2023. By following this method, you can gain a better understanding of how your income tax is calculated and make informed financial decisions.
Let us take an example on how to calculate income tax for clear and concise understanding.
Step 1 : Determine your taxable income: Subtract any applicable deductions or exemptions from your gross income to arrive at your taxable income. Let's assume you have deductions totaling INR 3,00,000, resulting in a taxable income of INR 12,00,000.
Step 2: Identify the tax brackets and rates: Refer to the current income tax slab rates for individuals in India to determine the applicable tax brackets and rates. As of September 2021, let's assume the following tax brackets and rates:
Income up to INR 2,50,000: No tax.
Income between INR 2,50,001 and INR 5,00,000: 5% tax.
Income between INR 5,00,001 and INR 10,00,000: 20% tax.
Income above INR 10,00,000: 30% tax.
Step 3 : Calculate the tax for each tax bracket: Apply the respective tax rates to the income within each tax bracket. Using the given tax brackets and rates:
For the first INR 2,50,000, tax is exempted.
For the next INR 2,50,000, the tax would be 5% of INR 2,50,000, which equals INR 12,500.
For the next INR 5,00,000, the tax would be 20% of INR 5,00,000, which equals INR 1,00,000.
For the remaining INR 2,00,000, the tax would be 30% of INR 2,00,000, which equals INR 60,000.
Step 4 : Sum up the tax from each tax bracket: Add the taxes calculated for each tax bracket to obtain the total tax liability. In this example, the total tax would be INR 12,500 + INR 1,00,000 + INR 60,000 = INR 1,72,500.
This example considered under Income-tax (Sixth Amendment) Rules, 2023, with a gross income of INR 15,00,000 and applicable deductions of INR 3,00,000, the income tax liability would amount to INR 1,72,500.
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About Income-tax (Sixth Amendment) Rules, 2023 :
As earning employees, one of our responsibilities towards the government is to contribute a portion of our income in the form of taxes, commonly referred to as income tax. These taxes take a major part in funding social infrastructures, welfare programs, and various other government schemes. Tax laws are periodically updated and amended in order to enhance fairness, efficiency, and merge with economic conditions.
Recently the Ministry of Finance has made new amendments relating to The Income-tax (Sixth Amendment) Rules, 2023. Which applies to those who are government employees, private employees as well as business men. Earning more than Rs. 3,00,000/- per annum. Whereas there will be some exemptions for the senior citizens and super senior citizens that exceeds around Rs. 5,00,000/-.
Income-tax (Sixth Amendment) Rules, 2023 :
Income-tax (Sixth Amendment) Rules, 2023 cut-off and eligibility :
The income tax is levied upon the individuals based upon their earning capacities and gross income per year. There are some litigations based on which the sum amount of tax varies from one to another. According to the income tax rules, one should pay around 10% tax if his/her income exceeds more than Rs. 50,00,000/-. Followed by 15% for income more than 1 crore, 25% for more than 2 crore. And 37% for more than 5 crores per year.
New income tax slab for 2023-24 :
These are some new changes in taxation that were brought by the Indian government under the Ministry of Finance. Here it involves three categories. Taxation rates for the people who are below 60 years. The senior citizens who are 60 and more than 60 years. And finally the super senior citizens who crossed 80 years. Just have a look at the below table for much better understanding.
Age-related income tax percentages for those under 60 :
Age-related income tax percentages for those over 60 :
Those 80 and older are taxed at the following rates :
Income-tax (Sixth Amendment) Rules, 2023 calculator :
Here’s a method to calculate your income tax upon your income per year without relying on online applications or tools. These steps enable you to determine your tax liability based on your annual income as per Income-tax (Sixth Amendment) Rules, 2023. By following this method, you can gain a better understanding of how your income tax is calculated and make informed financial decisions.
Let us take an example on how to calculate income tax for clear and concise understanding.
Step 1 : Determine your taxable income: Subtract any applicable deductions or exemptions from your gross income to arrive at your taxable income. Let's assume you have deductions totaling INR 3,00,000, resulting in a taxable income of INR 12,00,000.
Step 2: Identify the tax brackets and rates: Refer to the current income tax slab rates for individuals in India to determine the applicable tax brackets and rates. As of September 2021, let's assume the following tax brackets and rates:
Income up to INR 2,50,000: No tax.
Income between INR 2,50,001 and INR 5,00,000: 5% tax.
Income between INR 5,00,001 and INR 10,00,000: 20% tax.
Income above INR 10,00,000: 30% tax.
Step 3 : Calculate the tax for each tax bracket: Apply the respective tax rates to the income within each tax bracket. Using the given tax brackets and rates: For the first INR 2,50,000, tax is exempted.
For the next INR 2,50,000, the tax would be 5% of INR 2,50,000, which equals INR 12,500.
For the next INR 5,00,000, the tax would be 20% of INR 5,00,000, which equals INR 1,00,000.
For the remaining INR 2,00,000, the tax would be 30% of INR 2,00,000, which equals INR 60,000.
Step 4 : Sum up the tax from each tax bracket: Add the taxes calculated for each tax bracket to obtain the total tax liability. In this example, the total tax would be INR 12,500 + INR 1,00,000 + INR 60,000 = INR 1,72,500.
This example considered under Income-tax (Sixth Amendment) Rules, 2023, with a gross income of INR 15,00,000 and applicable deductions of INR 3,00,000, the income tax liability would amount to INR 1,72,500.
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