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Finance minister Nirmala Sitharaman on Saturday rolled out a new optional income tax regime that offers lower rates as a trade-off for foregoing exemptions for annual incomes up to Rs 15 lakh. The move was projected as an effort to provide relief and simplicity to taxpayers, particularly those at lower and middle income levels.
Finance minister Nirmala Sitharaman on Saturday rolled out a new optional income tax regime that offers lower rates as a trade-off for foregoing exemptions for annual incomes up to Rs 15 lakh. The move was projected as an effort to provide relief and simplicity to taxpayers, particularly those at lower and middle income levels.
The tax structure has been rejigged with the introduction of four thinly-sliced tax slabs between Rs 5 lakh and Rs 15 lakh with the rate applicable to each of them going down — from 20% to 10% between Rs 5 lakh and Rs 7.5 lakh, from 20% to 15% in the Rs 7.5 lakh-Rs 10 lakh bracket, from 30% to 20% for Rs 10 lakh-Rs 12.5 lakh and from 30% to 25% between Rs 12.5 lakh and Rs 15 lakh. In return for the lower taxes, those opting for this new scheme would have to forgo all deductions available under the existing regime.The FM in her speech said this would lead to “substantial tax benefit” and gave the example of a person earning Rs 15 lakh and not using any exemptions now. Such a person, she said, could save Rs 78,000 in tax annually.
The tax structure has been rejigged with the introduction of four thinly-sliced tax slabs between Rs 5 lakh and Rs 15 lakh with the rate applicable to each of them going down — from 20% to 10% between Rs 5 lakh and Rs 7.5 lakh, from 20% to 15% in the Rs 7.5 lakh-Rs 10 lakh bracket, from 30% to 20% for Rs 10 lakh-Rs 12.5 lakh and from 30% to 25% between Rs 12.5 lakh and Rs 15 lakh. In return for the lower taxes, those opting for this new scheme would have to forgo all deductions available under the existing regime. Read more
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