Budget 2022 Taxation: Read Budget 2022 Expected Tax Slabs here

On 1 February, FM Sitharaman will propose the full-year budget for the fiscal year 2022-23. The yearly budget decisions pertaining to income tax slabs are eagerly awaited by citizens throughout India.

There were no adjustments in income tax slabs in the previous budget, which was the first full-fledged Union Budget since the coronavirus became a pandemic. FM Sitharaman, on the other hand, proposed a new tax structure in the most recent Budget, giving individuals the option of paying tax under the new structure with reduced rates but no deductions or continuing to pay tax under the previous tax rules and claiming the necessary exemptions.

A slab system operates throughout the nation, with varying tax rates specified for different slabs, according to existing regulations. Individual taxpayers are divided into three categories: individuals (under 60 years old), residents and non-residents, resident senior citizens (60 years and older but under 80 years old), and resident super senior citizens (above 80 years of age).

Budget 2022: Taxation Slabs

Old Taxation Slab Rates

Income Tax Slab	Income Tax Rate
Up to INR 2,50,000	Nil
INR 2,50,001 – INR 5,00,000	5% above INR 2,50,000
INR 5,00,001 – INR 10,00,000	INR 12,500 + 20% above INR 5,00,000
Above INR 10,00,000	INR 1,12,500 + 30% above INR 10,00,000

New Taxation Slab Rates

Income Tax Slab	Income Tax Rate
Up to INR 2,50,000	Nil
INR 2,50,001 – INR 5,00,000	5% above INR 2,50,000
INR 5,00,001 – INR 7,50,000	INR 12,500 + 10% above INR 5,00,000
INR 7,50,001 – INR 10,00,000	INR 37,500 + 15% above INR 7,50,000
INR 10,00,001 – INR 12,50,000	INR 75,000 + 20% above INR 10,00,000
INR 12,50,001 – INR 15,00,000	INR 1,25,000 + 25% above INR 12,50,000
Above INR 15,00,000	INR 1,87,500 + 30% above INR 15,00,000

Budget 2022: What are the tax implications of stock market gains?

The taxability of profits is determined by variables such as holding length and transaction volume under the Income Tax Act of 1961. If the assessee acquired the shares for the purpose of investment, they would be considered a capital asset and subject to capital gains tax. However, if the shares are acquired and sold often over a short period of time, they will be taxed as business income.

Capital gains are the profits on which the tax is charged; they are then separated into short-term and long-term capital gains depending on how long they have been held. If the taxpayer holds any shares for more than one year (two years for unlisted shares), they are considered long-term, and if not, they are classified as short-term.

LTCG from unlisted stocks is taxed at 20 percent under section 112 of the income tax act, whilst short-term capital gain (STCG) is taxed at the investor’s required slab rate. If the shares are listed, however, they are liable to a 10 to 15 percent tax rate under Sections 111A and 112A, respectively. The company income is taxed at the slab rate that applies to individuals.

Do check out our detailed analysis on ‘Budget 2022’ here –

FAQs

What tax slab changes were introduced in the budget for FY 2021-2022?

The Union Budget of FY 2021-2022 introduced no changes in the prevalent tax slabs. Since it has remained unchanged for the last 2 years, the taxpayers of the nation are eager to see if any new changes or benefits are introduced in this new Union Budget.

Are the tax slabs uniform for the entire population?

While the income tax slabs have remained unchanged, they are not the same for all. For example while the tax exemption for people below the age of 60 is INR 2.5 L, for senior citizens (which means people above the age of 60) it is INR 3 L. Moreover, for people above the age of 80 it is INR 5 L. Similarly, senior citizens and those above the age of 80 have different percentages of tax liability for amounts in excess of the basic slab.

How does the Healthcare sector benefit from the budget?

Every taxpayer needs to pay an additional amount of 4 percent as Health and Education cess which contributes to the needs of the underprivileged. Moreover, in the light of Covid-19 outbreak extra grants were commissioned for the healthcare sector for providing vaccination and several other initiatives. In the last Union Budget INR 2,34,846 crore was allotted for health care. 

Is it better to pay tax under the old or the new tax regime?

This entirely depends on which bracket you fall under and what are your individual investments in the financial year. It needs a careful evaluation of your sources of income and the corresponding tax liability. People who have invested in a lot of tax saving instruments may not get the same benefits under the new tax regime, while people with lower annual incomes may do so. It is recommended to make use of online tax calculators to compare and contrast the tax liabilities under both systems before making your decision.