Income Tax Rate Slabs In India? What If You Are Earning More & Not Paying Tax?
In India income tax is levied on individuals and entities that earn an income within the country. The income tax rates in the nation are divided into different tax slabs, which vary depending on the amount of income earned. In this article, we will take a closer look at the income tax rate slab in the country and how much money one needs to earn to be liable for paying income tax. So, here we will discuss all the consequences of earning more and not paying taxes.
So, as you all know that every Indian individual who earns more than the limit that he/she has shown in the government record then they have to pay a certain amount of tax which is decided by the income tax department, well, today here we are talking about what are the Income tax rate slabs in the nation and what if someone is earning more but not paying the fixed amount of tax on the amount someone is earning.
Income Tax Rate Slab In India?
Finally, it matters a lot in our lives, therefore, we would like to tell you about the tax rate slabs that you should know. An income tax rate slab is a system used to determine the amount of tax an individual needs to pay based on their income. Indian income tax rate slab is divided into various categories, each corresponding to a particular tax rate. However, the tax rates increase with an increase in income, and the tax liability varies depending on the category an individual falls into.
How Much Money Do You Need To Pay Income Tax In India?
In the nation, an individual must pay income tax if their annual income exceeds a certain threshold. The threshold limit for the financial year 2022-23 is Rs. 2.5 lakh for individuals below 60, Rs. 3 lakh for individuals between 60-80, and Rs. 5 lakh for individuals above 80. If an individual’s annual income is below the threshold limit, they are not required to pay any income tax.
However, if an individual’s income exceeds the threshold limit, they are liable to pay income tax as per the applicable tax rates. Here are the income tax rates for the financial year 2022-23 are as follows:
For individuals below 60 years of age:
- Up to 2.5 lakh: No tax
- 2.5 lakh to 5 lakh: 5% tax
- 5 lakh to 10 lakh: 20% tax
- Exceeding Rs. 10 lakh: 30% tax
For individuals between 60-80 years of age:
- More Than 3 lakh: No tax
- Rs. 3 lakh to 5 lakh: 5% tax
- 5 lakh to 10 lakh: 20% tax
- Above 10 lakh: 30% tax
For individuals above 80 years of age:
- Up to 5 lakh: No tax
- 5 lakh to 10 lakh: 20% tax
- Above 10 lakh: 30% tax
However, it is mandatory to keep one thing in your mind, the above tax rates do not include surcharges and cesses, which may be applicable based on an individual’s income.
If You Are Earning More & Not Paying Taxes?
If an individual is earning more than the threshold limit and is not paying taxes, they are committing tax evasion, which is a punishable offense under the Income Tax Act of India. Tax evasion can result in hefty penalties, fines, and even imprisonment, depending on the severity of the offense. So, the Income Tax Department of India has several measures in place to detect tax evasion, including data mining, analysis of financial transactions, and conducting raids and surveys. If an individual is evading taxes, the department can initiate legal proceedings against them.
In addition to the legal consequences, not paying taxes can have other repercussions. It can lead to a loss of reputation and credibility, affecting an individual’s personal and professional life. Moreover, not paying taxes means not contributing to the country’s development and welfare, which can have a negative impact on the economy and society.
Finally, saying this won’t be a bad thing is that Income tax is an essential part of a country’s financial system, and it is important for individuals to comply with tax laws. Although, the income tax rate slab in the country is designed to ensure that the tax burden is distributed fairly, with those who earn more paying a higher percentage of their income.
