Income Tax Calculation For Senior Citizens FY 2020-21

In this article you will learn how to do income tax calculation for senior citizens FY 2020-21 AY 2021-22.

Income tax

Income tax calculation for senior citizens FY 2020-21

Before calculating income tax for senior class,let us have a glance at new Budget 2020 :

  • About 70 exemptions and deductions are withdrawn.
  • Tax slab rates reduced.
  • You have the option to calculate your tax either according to FY 2019-20 or FY 2020-21 tax rates.
  • New budget will be applicable from 1st April 2020 to 31st March 2021.
  • Rebate of ₹ 12,500 under section 87A is applicable.
  • Health and education cess remains at 4%.

Latest Income tax calculator for salaried employees FY 2019-20

Income tax slab rates for Senior citizens FY 2020-21

Tax slab ratesTax Rate
0-250,000Nil
250,001 to 5,00,0005%
5,00,001 to 750,00010%
750,001 to 10,00,00015%
10,00,001 to 12,50,00020%
12,50,001 to 15,00,00025%
Above 15,00,00030%

If  your pension is 5 lakhs

Suppose your pension is 5 lakhs.

So as per budget 2020 you can not claim any deduction except some deductions which are still available.

Check the deductions still available under new tax regime 2020

So assuming that you are unable to claim any deduction or exemption,your tax calculation will be as under :

0-2,50,000 = Nil Tax

2,50,001-5,00,000 = 5% of 2,50,000 = ₹ 12,500.

Now,since the total income is 5 lakhs ,so you can claim rebate of ₹ 12,500 as per section 87A of income tax.

Finally, your tax liability is 12,500-12,500 = 0 (TAX – REBATE).

If  your pension is 6 lakhs

Suppose your pension is 6 lakhs.

So as per budget 2020 you can not claim any deduction except some deductions which are still available.

So assuming that you are unable to claim any deduction or exemption,your tax calculation will be as under :

0-2,50,000 = Nil Tax

2,50,001-5,00,000 = 5% of 2,50,000 = ₹ 12,500.

5,00,001-6,00,000 = 10% of 1,00,000 = ₹ 10,000.

Now,since the total income exceeds 5 lakhs ,so you can not claim rebate of ₹ 12,500 as per section 87A of income tax.

Hence your total tax is 12,500 + 10,000 = ₹ 22,500.

Education cess 4% 0f 22,500 = ₹ 900.

So your total tax liability for gross pension of ₹ 6 lakhs is ₹ 22,500+900 = 23,400.

If  your pension is 7 lakhs

Suppose your pension is 7 lakhs.

So as per budget 2020 you can not claim any deduction except some deductions which are still available.

So assuming that you are unable to claim any deduction or exemption,your tax calculation will be as under :

0-2,50,000 = Nil Tax

2,50,001-5,00,000 = 5% of 2,50,000 = ₹ 12,500.

5,00,001-7,00,000 = 10% of 2,00,000 = ₹ 20,000.

Now,since the total income exceeds 5 lakhs ,so you can not claim rebate of ₹ 12,500 as per section 87A of income tax.

Hence your total tax is 12,500 + 20,000 = ₹ 32,500.

Education cess 4% 0f 32,500 = ₹ 1300.

So your total tax liability for gross pension of ₹ 7 lakhs is ₹ 32,500+1300 = 33,800.

If  your pension is 8 lakhs

Suppose your pension is 8 lakhs.

So as per budget 2020 you can not claim any deduction except some deductions which are still available.

So your tax calculation will be as under :

0-2,50,000 = Nil Tax

2,50,001-5,00,000 = 5% of 2,50,000 = ₹ 12,500.

5,00,001-7,50,000 = 10% of 2,50,000 = ₹ 25,000.

7,50,001-8,00,000 = 15% of 50,000 = ₹ 7500.

Now,since the total income exceeds 5 lakhs ,so you can not claim rebate of ₹ 12,500 as per section 87A of income tax.

Hence your total tax is 12,500 + 25,000 + 7500 = ₹ 45,000.

Education cess 4% 0f 45,000 = ₹ 1800.

So your total tax liability for gross pension of ₹ 8 lakhs is ₹ 45,000+1800 = 46,800.

If  your pension is 9 lakhs

Suppose your pension is 9 lakhs.

So as per budget 2020 you can not claim any deduction except some deductions which are still available.

So your tax calculation will be as under :

0-2,50,000 = Nil Tax

2,50,001-5,00,000 = 5% of 2,50,000 = ₹ 12,500.

5,00,001-7,50,000 = 10% of 2,50,000 = ₹ 25,000.

7,50,001-9,00,000 = 15% of 1,50,000 = ₹ 22,500.

Now,since the total income exceeds 5 lakhs ,so you can not claim rebate of ₹ 12,500 as per section 87A of income tax.

Hence your total tax is 12,500 + 25,000 + 22,500 = ₹ 60,000.

Education cess 4% 0f 60,000 = ₹ 2400.

So your total tax liability for gross pension of ₹ 9 lakhs is ₹ 60,000+2400 = 62,400.

If  your pension is 10 lakhs

Let us Suppose your pension is 10 lakhs.

So as per budget 2020 you can not claim any deduction except some deductions which are still available.

So your tax calculation will be as under :

0-2,50,000 = Nil Tax

2,50,001-5,00,000 = 5% of 2,50,000 = ₹ 12,500.

5,00,001-7,50,000 = 10% of 2,50,000 = ₹ 25,000.

7,50,001-10,00,000 = 15% of 2,50,000 = ₹ 37,500.

Now,since the total income exceeds 5 lakhs ,so you can not claim rebate of ₹ 12,500 as per section 87A of income tax.

Hence your total tax is 12,500 + 25,000 + 37,500 = ₹ 75,000.

Education cess 4% 0f 75,000 = ₹ 3000.

So your total tax liability for gross pension of ₹ 10 lakhs is ₹ 75,000+3000 = 78,000.

Final Words

To be honest,if you have no saving,then new slab rates for senior citizens FY 2020-21 going to be beneficial for you.Whereas tax slab rates for FY 2019-20 are good to go in case, you have any deduction or exemption.

 

 

Kuldeep Singh
 

is a professional blogger,teacher and income tax expert

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