New Delhi: Finance Minister Nirmala Sitharaman today, for the first time after the Modi government brought about major change in Income Tax when it presented the first Budget in 2014, introduced adjustments in the exemption structure and slashed the personal income tax rate for individuals for fiscal year 2020-21.
Now the taxpayers will pay 10%, 15%, 20% and 25% for income slabs of Rs 5-7.5 lakh, Rs 7.5-10 lakh, Rs 10-12.5 lakh and Rs 12.5-15 lakh, respectively.
Earlier the taxpayers were paying 20% for incomes between Rs 5-10 lakh and 30% for incomes between Rs 10-15 lakh.
This scheme will be available only to those who do not go for exemptions.
Under the new tax regime, Income below Rs 2.5 lakh will remain exempt whereas income between Rs 2.5 and Rs 5 lakh will continue to get a rebate.
FM Sitharaman suggested that someone earning Rs 15 lakh could benefit by as much as Rs 78,000 though the benefits that individual taxpayers will get from the announcement will depend on whether they take the benefit of exemptions.
In order to provide significant relief to the individual taxpayers and to simplify the income-tax law, Ms. Sitharaman said in her speech, she proposes to bring a new and simplified personal income tax regime wherein income tax rates will be significantly reduced for the individual taxpayers who forgo certain deductions and exemptions. She further said that the government would continue to rationalise exemptions.
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