In the Union Budget of last fiscal year 2020, Finance Minister Nirmala Sitharaman added three income tax slabs previously.
The Budget 2020 plan tried to put more money in the taxpayers’ hands. It was done by curtailing the incentives to save. It was a good attempt by Sitharaman for the FY2020 Budget.
FM announced in her speech of Union Budget 2020, that the taxpayer will save Rs 78,000 under the new tax regime. This provision was made for those taxpayers who’s earning was at the level of Rs 15 lakh.
However, the new income tax slabs and rates will have no change in the tax exemption which is given to income up to Rs 5 lakh in interim.
The previous rates were tax deduction up to 5 percent for the taxpayers with annual income up to Rs 2.5 lakh.
However, there are no as such deduction incurred for this year as per the records.
The range goes on from the annual income above Rs 2.5 lakh to Rs 10 lakh to 5 percent to 20 percent of tax deduction as per the new update.
Further, the new rate for the range of 10 lakh – 12.5 lakh, 12.5 lakh – 15 lakh would be 20% and 25% respectively.
The tax payers with annual income of Rs 15 lakh will have the same old rate of 30%.
In the new regime you will not get some of the exemptions and reductions such as Section 80C investments, House rent allowance, Housing loan interest.
The list also includes Leave travel allowance, Medical insurance premium. Further elements includes Standard deduction Savings bank interest and Education loan interest.
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