Threshold Limits under Income Tax Act
Persons earning more than a specific limit are levied taxes at a prefixed rate. The tax is charged on the basis of the total income and residential status of the individual. The threshold limits/tax slab rates are updated for every assessment year.
Individuals who earn income over a certain limit will be charged taxes under the Income Tax Act. The individual, or assessee, as they are called, shall be charged at the rate predetermined by the act for each assessment year.
The tax will be determined depending upon the individual’s residential status. The amount of money payable at the end of each assessment year will be based on the total income the individual has earned over the previous financial year.
The nature of income is also a deciding factor for income tax as taxes are different for capital income and revenue income.
Following is a table displaying the tax slabs for individuals under varying income categories for the assessment year 2024-2025.
Income Tax Slabs (Old Regime) | General Catrgory (Income Tax Rates) | Senior citizens | Super senior citizens |
Up to Rs.2,50,000 | Nil | Nil | Nil |
Rs.2,50,001 to Rs.5,00,000 | 5% | Nil | Nil |
Rs.3,00,001 to Rs.5,00,000 | 5% | 5% | Nil |
Rs.5,00,001 to Rs.10,00,000 | 20% | 20% | 20% |
Above rs.10,00,000 | 30% | 30% | 30% |
Senior citizens are those who have completed 60 years of age during the previous year but have not exceeded 80 years of age as on the final day of the previous year. Super senior citizens are those who are 80 years of age or older as of the previous year.
As can be seen above, the tax slabs are comparatively easier on senior citizens, but individuals who are under 60 years of age and earn an income under Rs.250,000 will be exempt from tax, while individuals who earn between Rs.250,001 and Rs.500,000 will be charged tax at 5%.
Individuals who earn an annual income in excess of Rs.500,000 and under Rs.1,000,000 will be charged 20% on their earnings while individuals who earn more than Rs.1,000,000 will be charged tax at 30%.
Individuals can claim deductions on taxes too. Following is a TDS (Tax Deducted at Source) table and their limits:
IT Section | TDS Rate | Threshold Limit |
Section 192 | As per income tax slab rate | As per applicable income slab |
Section 193 | 10% of the interests earned on security investments. | ₹ 5000 for debenture payment |
Section 194 | 10% of proceeds from any deemed dividends | ₹ 2500 |
Section 194A | 10% of proceeds from interests earned on investments other than securities | ₹ 10,000 |
Section 194B | 30% of prize money on lottery or gaming related winnings | ₹ 10,000 |
Section 194BB | 30% of prize money from horse racing | ₹ 10,000 |
Section 194C |
| |
Section 194D | 5% of earning as insurance commissions | ₹ 15,000 |
Section 194EE | 20% of expense in NSS deposits | ₹ 2,500 |
Section 194F | 20% of investment in MF or UTI units | NIL |
Section 194G | 5% of the commission money from lottery ticket selling. | ₹ 15,000 |
Section 194H | 5% of the brokerage earnings | ₹ 15,000 |
Section 194I | 2% on rental amount of plant & machinery/ 10% on the rent of land & building | ₹ 1,80,000 |
Section 194J | 10% on the technical/professional services | ₹ 30,000 p.a |
Section 194LA | 10% on the transfer money paid to any resident while acquiring an immovable property | ₹ 2,50,000 |
When an individual responsible for paying any income deducts income tax on income when paying the tax, it is referred to as Deduction of Tax at Source (TDS).
All individuals, proprietary concerns and Hindu Undivided Families that are carrying on business in India and whose turnover, gross sales or gross receipts in the previous year is in excess of Rs.1 crore (in case of business) or Rs.25 lacs (in case of professionals), will also be eligible for tax deductions under the Income Tax Act.
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