We all are aware of the fact that we all have to pay tax. Usually, the amount of income tax depends on the income of the person. However, how much do we really know about the tax brackets? And what qualifies someone to enter the tax bracket? Let us find out.
The tax bracket keeps varying every financial year depending upon the provisions made in the Union Budget. So, let's help you understand and keep you updated with the updated tax bracket applicable for the current financial year. The tax slab is divided into three categories, one is for people who are below 60 years, the other one is for senior citizens between the age of 60 and 80 years, and the last one for senior citizens who are above the age of 80 years.
As explained in the table, people who are below the age of 60 are eligible to enter the tax bracket after they start earning between Rs. 2,50,000 pa to Rs. 5,00,000 pa. Their tax rate is 5% and they end up paying 5% of tax. In addition to that, people who earn between Rs. 5,00,000 pa to Rs. 10,00,000 pa have a tax rate of 20%. While those who earn Rs. 10,00,000 and above end up paying 30% of tax.
Second category tax slab also has a similar tax rate as the First category. However, the eligibility to enter the tax bracket has gone up by Rs. 50,000. So, anyone who earns below Rs. 3,00,000 pa and belongs to the second category, won't have to pay any income tax.
As you can see in the third category table, there is a higher relaxation on tax. People in this category can earn up to Rs. 5,00,000 pa without paying any income tax. However, the rest of the two other criteria remain the same.
So, that is all that we had to explain about the tax brackets and the different categories of income tax slabs. We hope that you found this article to be helpful.