Income tax slab for the elderly after the 2022 budget; all you need to know

Finance Minister Nirmala Sitharaman tabled the Union Budget 2022-23 in Parliament on February 1. The Minister of Finance has not announced any changes in the personal income tax brackets and brackets in the 2022 budget. Thus, with no change in the personal income tax brackets and brackets, an individual taxpayer will continue to pay the same tax rate according to the tax regime chosen for the 2022-23 financial year.

Income tax plates

Current income tax plates for individuals (resident or non-resident), age 60 or over but under age 80 at any time during the previous year:

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Current income tax plates for individuals (resident or non-resident) age 80 or older at any time during the previous year:

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Effective April 1, 2020, an individual salaried taxpayer has the option to continue with the old tax regime and benefit from tax deductions/exemptions such as Section 80C, 80D, HRA deductions, LTA tax exemptions, etc. or opt for the new tax. and waiving approximately 70 tax deductions and exemptions. The new tax system offers lower tax rates than the old tax system.

Under both income tax schemes, a tax refund of up to Rs 12,500 is available to an individual taxpayer under Section 87A of the Income Tax Act 1961. This would effectively mean that people with a net taxable income of up to Rs 5 lakh pay no income tax regardless of the tax regime chosen by them.

Another thing to keep in mind is that under the old tax system, the basic tax exemption limit for an individual taxpayer depends on their age and residency status. However, under the new tax regime, the basic exemption limit is Rs 2.5 lakh in a fiscal year.

There are two important points to note according to the Income Tax Service website:

-The rates of the surtax and the health and education tax are the same under the two tax regimes (old and new).

-u/s 87 rebate – A resident person whose total income is not more than Rs.5,00,000 is also eligible for a rebate of up to 100% of income tax or Rs. the lower amount. This refund is available under both tax regimes.

In the 2021 Union Budget, Finance Minister Nirmala Sitharaman announced that people over the age of 75, who only have a pension and interest as a source of income, will be exempted from filing tax returns. income. During his budget speech, Sitharaman said, “In the 75th year of our country’s independence, the government will reduce the compliance burden for people aged 75 and over.”

It should be noted that seniors, aged over 75, are not exempt from tax but only from the declaration of income (RTI) if they meet certain conditions. The tax filing exemption would only be available where the interest income is earned in the same bank where the pension is deposited.

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