When I first got a job, my primary concern was related to taxes. I had zero knowledge of taxation system, limits, deductions, investments, absolutely nothing. I had a senior colleague who was extremely kind and helpful to talk me through the whole thing patiently and explained to me about the basic exemption limit for income tax. I shall share the same with you.
What is basic exemption limit?Before talking about the tax exemption limit, let me tell you that there are two income tax regimes which are currently underway with regards to Income Tax rates - the old regime and new regime. There is a significant difference between the two but there is one common thing - the basic exemption limit.
To answer your query: Basic exemption limit for people is Rs. 2.5 lakhs regardless of their gender or type of employment.
Here is a table depicting the old and new tax rates for your reference:
| Yearly Income (Rs) | Old Tax Rate | New Tax Rate |
Up to 2.5 Lakhs |
Nil |
Nil |
2.5 to 5 Lakhs |
5% |
5% |
5 to 7.5 Lakhs |
20% |
10% |
7.7 to 10 Lakhs |
20% |
15% |
10 to 12.5 Lakhs |
30% |
20% |
12.5 to 15 Lakhs |
30% |
25% |
15 Lakhs and above |
30% |
30% |
So, now you can see in which income bracket you fall and accordingly see if you can avail basic exemption limit or not.
Get rent receipts on your email by paying rent via NoBroker rent pay and claim deduction easily.Read more:
Which tax regime is better old or new
Difference between new tax regime and old tax regime
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What is basic exemption limit?
Yamini
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3 Year
2022-05-20T10:38:10+00:00 2022-05-20T10:38:11+00:00Comment
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