What is a Tax Table?

A tax table is one chart that showcases the tax amount that is due on the Basis of Income received. In the table, the Tax Rate could be displayed as a percentage rate, a discrete amount or an amalgamation of both.

Generally, tax tables are used by companies, individuals and estates for Capital gains and standard income.

Explaining Tax Tables

Each year, individuals and business taxpayers have to pay an Effective Tax Rate on income. This tax paid by everybody is based on several factors, like the amount of income earned in a year, exemptions, tax credits and deductions, filing status, and more.

On the basis of such factors, tax rates are finalized for a given year. Basically, both the taxpayers as well as the taxing authorities get to comprehend the tax amount to be paid in a year. Thus, a basic tax table will showcase breakpoints of income levels, below and above which varying tax rates are applied.

But these tax tables only show Taxable Income, which is the one that you get by subtracting gross income from deductions; and not the gross income. Hence, only the remaining amount is subjected to income tax.

For instance, suppose a standard Deduction for a year is Rs. 10,000. If you have managed to earn Rs. 1,00,000 in a year, your income tax amount will be Rs. 1,00,000 – Rs. 10,000 = Rs. 90,000. In simple words, the higher the taxable income, the more taxpayer is taxed.

Tax tables get set with a variety of columns for every filing status and rows of different taxable income amounts. On the basis of your filing status; be it married, single, head of a household, etc.; you can trace your Tax Liability on this tax table.

Income Tax Table for FY 2020-2021