Income Tax Slab above 50 lakhs for FY 2020-21, FY 2021-22, FY 2022-23
- Are there separate slab rates for different categories?
- Is income upto 5 lakhs tax free?
- The marginal relief (when income is more than Rs 50 lakhs) is available or not?
- Is 50000 deduction available in new tax regime?
- How much marginal relief (when income is more than Rs 50 lakhs) is available?
- How much income tax you have to pay?
- How much education cess you have to pay?
- How much surcharge you have to pay?
- Which tax regime is beneficial to you?
- How much tax you have to pay (TDS) on monthly basis?
- What is my monthly salary after income tax?
- how to calculate marginal relief?
Practical Illustration to calculate Income Tax:
Let’s understand the income tax calculation with help of a practical illustration. Suppose Mr Chatur is having annual income is Rs 5568900/- let’s see how income tax is calculated.
First of all we have to check what are the changes between new tax regime as well as old tax regime to calculate income tax. Here is the income tax slab comparison between old tax regime and new tax regime.
| Total Income | Old Tax Regime Tax Slab | New Tax Regime Tax Slab |
| Up to Rs 250000 | NIL | NIL |
| Rs 250001 to Rs 500000 | 5% Tax* | 5% Tax* |
| Rs 500001 to Rs 750000 | 20% Tax | 10% Tax |
| Rs 750001 to Rs 1000000 | 20% Tax | 15% Tax |
| Rs 1000001 to Rs 1250000 | 30% Tax | 20% Tax |
| Rs 1250001 to Rs 1500000 | 30% Tax | 25% Tax |
| Rs 1500001 and above | 30% Tax | 30% Tax |
| PARTICULARS | OLD TAX REGIME | NEW TAX REGIME | |
| Total Salary received | 5568900 | 5568900 | |
| Less | Standard Deduction | 50000 | 0 |
| Less | Professional tax | 2400 | 0 |
| Net of Amounts | 5516500 | 5568900 | |
| Less | Income From House Property (Interest on Home Loan u/s 24 (b)) Maximum Deduction Rs 200000/- | 190000 | 0 |
| Net of Amounts | 5326500 | 5568900 | |
| Less | Deduction u/s 80C (PF, LIC, Education fees, Repayment of Housing Loan etc) | 150000 | 0 |
| Less |
Deduction u/s 80D (Medical / Health Insurance Premium) |
25000 | 0 |
|
Net of Amounts |
5151500 | 5568900 | |
|
Net Taxable Income |
5151500 | 5568900 |
Let’s calculate income tax by income tax slab percentages fixed by the income tax department. Here is the income tax calculation for old tax regime as well as new tax regime:
| PARTICULARS | OLD TAX REGIME | NEW TAX REGIME |
| Up to Rs 250000 | NIL | NIL |
|
Rs 250001 to Rs 500000 Tax on Rs 250000/- |
Rs 12500 (5% Tax) | Rs 12500 (5% Tax) |
|
Rs 500001 to Rs 750000 Tax on Rs 250000/- |
Rs 50000 (20% Tax) | Rs 25000 (10% Tax) |
|
Rs 750001 to Rs 1000000 Tax on Rs 250000/- |
Rs 50000 (20% Tax) | Rs 37500 (15% Tax) |
|
Rs 1000001 to Rs 1250000 Tax on Rs 250000/- |
Rs 75000 (30% Tax) | Rs 50000 (20% Tax) |
|
Rs 1250001 to Rs 1500000 Tax on Rs 250000/- |
Rs 75000 (30% Tax) | Rs 62500 (25% Tax) |
|
Rs 1500001 to Rs 5151500 Tax on Rs 3651500/- (for Old Tax Regime) Tax on Rs 4068900/- (for New Tax Regime) |
Rs 1095450 (30% Tax) | Rs 1220670 (30% Tax) |
|
Total Tax |
Rs 1357950/- | Rs 1408170/- |
Why and When marginal relief is available?
This is the practical example of income tax calculation, that, how the old tax regime and new tax regime is working. But, one thing is to be noted that, if, the income of a person is more that 50 lakh Rupees, there is something difference to calculate income tax. Then he have to pay surcharge. Here is how to calculate surcharge on income above 50 lakh rupees.
Practically, Marginal Relief is available when someone earns income more than 50 lakhs Rupees and difference between Tax on income and tax on 50 lakh Rupees is more than difference of 50 lakhs and income earned, marginal relief is available, because if someone earns more Rupees 100000, he have to pay more than he earned, so, marginal relief is available.
| Particulars | Old Tax Regime | New Tax Regime |
| Total Taxable Income | 5151500/- | 5568900/- |
| Tax Payable (as per above illustration) | 1357950/- | 1408170/- |
| Surcharge @ 10% of total tax payable | 135795/- | 140817/- |
| Marginal Relief Available (when someone earns income more than 50 lakhs Rupees and difference between Tax on income and tax on 50 lakh Rupees is more than difference of 50 lakhs and income earned, marginal relief is available.) | 29745/- | 0/- |
| Net Surcharge Payable (after marginal relief) | 106050/- | 140817/- |
| Total Tax (Tax + Net Surcharge) | 1464000/- | 1548987/- |
| Add: Health and Education Cess (4% of Total Tax) | 58560/- | 61959/- |
| Total Tax Payable (and deducted from salary in 12 equal amount) | 1522560/- | 1610946/- |
How to calculate marginal relief?
Here is we see why there is marginal relief is available, because, income tax on Rupees 5151500/- is Rupees 1493745/- (Tax 1357950+ Surcharge 135795 before cess and marginal relief) but tax on Rupees 50 lakhs is only Rupees 1312500/- (Tax is 1312500 + 0 cess) so, difference of taxes on income earned and taxes on Rupees 50 lakhs is 181245/- (1493745-1312500)
Now, difference of taxes of Rupees 181245 and income earned more than Rupees 50 lakhs (5151500-5000000) is Rupees 29745/- (181245-151500) which is marginal relief available to tax payer.
Conclusion
Thus, we have seen that a person having income more than 50 lakh rupees, how much income tax he had to pay by selecting new tax regime or old tax regime, how much deduction is available to a person, how much relief u/s 87A is available. We have also seen that when the marginal relief is available. So, this is complete guide for calculating income tax for new as well as old tax regime. Hope the article is useful to you and thank you for reading.