In Budget 2020, the Modi government has announced a new income tax slab in the country. Although the new income tax slab will be optional, people are still confused about this new slab.
The Modi government has presented the second general budget of its second term. With this budget, Finance Minister Nirmala Sitharaman has announced a new income tax slab. The new income tax slab will be optional, but people are still confused about this new slab.
Finance Minister Nirmala Sitharaman announced in the budget speech that income tax of Rs 2.50 lakh is completely exempt. There is a provision of a 5 percent tax on income up to Rs 2.50-5 lakh, although in this also the government rebates, which makes it completely tax-free. Those earning from 5 to 7.50 lakh rupees will now have to pay a 10 percent tax. Income from 7.50 lakh to 10 lakh rupees will now be taxed at 15 percent.
At the same time, those earning between 10 and 12.50 lakh rupees will have to pay a 20 percent tax. Apart from this, those earning Rs 12.50 lakh to 15 lakh will have to pay 25 percent tax. At the same time, whose income is more than 15 lakh rupees, such people will have to pay a 30 percent tax.
What is the old tax slab?
At the same time, according to the old tax slab, there is no income tax up to Rs 2.5 lakh. From 2.5 lakh rupees to 5 lakh rupees, there was a 5 percent income tax and the rebate was also available in it. Income tax of 20 percent was levied on income from Rs 5 lakh to Rs 10 lakh. Apart from this, the income tax of more than Rs 10 lakh had to pay a 30 percent income tax. However, taxpayers can choose one from both income tax systems.
At the same time, the Finance Minister said in the budget speech that those taxpayers who will not take advantage of deduction and exemption, they will get the benefit of the new rate of income tax. In total, after leaving 70 rebates, the new tax system will benefit. Experts say that the new tax slab will eliminate the benefit of all the exemptions available to taxpayers under section 80C, 80D, 24 of income tax in the tax system.
Which one gets a discount?
Actually, according to the new tax slab, the tax rate will be low but there will be no exemption. However, tax rebates will be available in the old tax slab. So far, people benefit from tax exemption by investing in LIC, PPF, NSC, ULIP, tuition fees, mutual funds ELSS, pension funds, home loans, term deposits in banks, 5 years deposit in the post office and “Sukanya Samriddhi Yojana” under 80C Pick up.
But this exemption will not be available in the new tax slab. Apart from this, there will also be no tax exemption on health insurance under 80D. In this case, the difference between the new and old tax slabs can be understood as an example.
How much income tax will be incurred if you earn 7.5 lakh rupees?
If the annual income is Rs 7.5 lakh and he has opted for either Rs 1.5 lakh, 80D or NPS under 80C, the maximum exemption of 50 thousand, the standard deduction is Rs 50 thousand and 2 lakh discount on homeland interest. If it becomes Rs 4.5 lakh, then taxable income will be Rs 3 lakh. Under which there will be no tax. But under the new tax slab, a tax of Rs 39000 with 4% cess is made.
On the other hand, if a person with an annual income of Rs 7.5 lakh gets a rebate of Rs 1.5 lakh under 80C, then his taxable income will be Rs 6 lakh. In this case, he will have to pay Rs 33800 as tax.
If you have an annual income of Rs 10 lakh, how much will be the income tax?
If the taxpayer’s annual income is Rs 10 lakh and he takes a total rebate of Rs 4.5 lakh, then the taxable income becomes Rs 5.5 lakh. On which a tax of Rs 23400 is made with 4% cess in the old tax slab. But in the new tax slab, the taxpayer will have to pay a tax of Rs 78000.
However, if a person with an annual income of Rs 10 lakh gets a rebate of Rs 1.5 lakh under 80C, then his taxable income will be Rs 8.5 lakh. In this case, he will have to pay a tax of Rs 85800.
If you have an annual income of Rs 12.5 lakh, how much will be the income tax?:-
At the same time, if the annual income is Rs 12.5 lakh and takes a discount of Rs 1.5 lakh only under 80C, then the taxable income in the old slab will be 11 lakh. In such a situation, a tax of Rs 148200 will be made. At the same time, according to the new slab, tax of Rs 1.30 lakh will be made on taxable income of 12.5 lakh.