FAQ

What is the purpose of having an app like Resolve My Tax?

The Finance Budget 2020 has added a new twist to the bulk of the approximately 58 million Individual taxpayers in India. On one side it has reduced the tax rates, introduced two new mezzanine tax slabs of Rs 7.50 lacs to 10 lacs @ 15% tax rate and the other being Rs 12.50 lacs to Rs 15 lacs @ 25%. In addition, the budget has introduced a concept of the Taxpayer having a choice to exercise either the new tax regime or a continuance of the old one. A new tax regime of simplified tax computations by eliminating 70 of the 100 tax exemptions and deductions or to continue with the old regime with the older tax slabs and retaining all the tax exemptions and deductions. Resolve My Tax is a service initiative of Resolve Biz Services and Apps Private Limited to all taxpayers to help them make an informed choice of which tax regime suits them the best. It's a simple to use application to help make a tax estimate for the Financial Year 2020-21

Under how many heads the income of a taxpayer is classified ?

The Income-tax Act has classified the income of a taxpayer under five different heads of Income

  • Salaries
  • Income from house property
  • Profits and gains of business or profession
  • Capital gains
  • Income from other sources

What is gross total income?

Total income of a taxpayer from all the heads of income (as discussed in previous FAQ) is referred to as Gross Total Income.

What are the Comparative Slabs and Tax Rates under both Old and New Regime?

Shown in the below Table

Comparative Slabs and Tax Rates

Income Slabs and Tax Rates: (Individuals who are below the age of 60 years)


Slabs Income Slabs (Rs) New Regime (%) Old Regime (%)
1 0- 2.5 Lakhs Nil Nil
2 2.5 Lakhs-5 Lakhs 5% 5%
3 5 Lakhs-7.5 Lakhs 10% 20%
3a 7.5 Lakhs-10 Lakhs 15% 20%
4 10 Lakhs-12.5 Lakhs 20% 30%
4a 12.5 Lakhs -15 Lakhs 25% 30%
5 15 Lakhs and above 30% 30%

Income Slabs and Tax Rates: (Senior Citizens who are between the age of 60-80 years)


Slabs Income Slabs (Rs) New Regime (%) Old Regime (%)
1 0- 3 Lakhs Nil Nil
2 3 Lakhs-5 Lakhs 5% 5%
3 5 Lakhs-7.5 Lakhs 10% 20%
3a 7.5 Lakhs-10 Lakhs 15% 20%
4 10 Lakhs-12.5 Lakhs 20% 30%
4a 12.5 Lakhs -15 Lakhs 25% 30%
5 15 Lakhs and above 30% 30%

Income Slabs and Tax Rates: (Super Senior Citizens who are above the age of 80 years)


Slabs Income Slabs (Rs) New Regime (%) Old Regime (%)
1 0- 5 Lakhs Nil Nil
2 3 Lakhs-5 Lakhs 5% 5%
3 5 Lakhs-7.5 Lakhs 10% 20%
3a 7.5 Lakhs-10 Lakhs 15% 20%
4 10 Lakhs-12.5 Lakhs 20% 30%
4a 12.5 Lakhs -15 Lakhs 25% 30%
5 15 Lakhs and above 30% 30%

Notes:

Surcharge Rates applicable under both the Old and New regime are as under:


Income Slabs (Rs) Surcharge Rates (%)
0-50 Lakhs NIL
50 Lakhs – 1 Crore 10% of Income Tax
1 Crore – 2 Crores 15% of Income Tax
2 Crores – 5 Crores 25% of Income Tax
Above 5 Crores 30% of Income Tax

The tax and surcharge calculated above will be further subjected to a Health and Education Cess of 4%. Rebate u/s 87A – No Tax would be payable on the Total Income up to Rs 5 Lakhs in both the regimes.

From the above table, it can be observed that there have been 2 new mezzanine tax rates introduced in 3a and 4a of 15% and 25% respectively. From an Income slab perspective, the level of Income and the age of the tax- payer determines the extent to which the tax- payer is able to maximize the tax exemptions and deductions and avail of the tax planning opportunities.

Can I claim deduction for my personal and household expenditure while calculating my taxable income or profit?

No, you cannot claim deduction of personal expenses while computing the taxable income.
While computing income under various heads, deduction can be claimed only for those expenses which are provided under the Income-tax Act.

My Son stays in USA. He owns a house in India and has let it out. He has asked tenants to pay rent to me. He has not received any rent. Is he still liable to tax? What if he transfers the house to me?

Rental income is charged to tax in the hands of the owner of the property. Your Son is the owner of the house and, therefore, he is liable to pay tax, even though you receive rent. If the house is transferred to you, then you will become the owner and you will have to pay Income-tax on the rental Income.

Can a partnership firm or HUF claim rebate under section 87A?

Rebate under section 87A is available only to a resident individual, hence, any person other than a resident individual cannot claim rebate under section 87A.

Can a non-resident claim rebate under section 87A?

Rebate under section 87A is available only to an individual who is resident in India, hence, non-residents cannot claim rebate under section 87A.

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