Finance Minister Nirmala Sitharaman on Saturday presented the Union Budget and announced big relief to taxpayers by slashing income tax rate cut but with conditions.
Under the new, optional regime, those with a taxable income between Rs 5 lakh and Rs 7.5 lakh will pay 10% tax, against the present 20%. The new tax regime is optional for those willing to forego all exemptions.
Apart from tax relief, the government also announced that it will sell a part of its holding in LIC via an IPO. The nominal growth of GDP for 2020-2021 has been pegged at 10 per cent. The fiscal deficit target pegged at 3.5% of GDP
The new tax rates cut will provide more money in the pocket of taxpayers.
Here are the new tax rates
- 0 to Rs 2.5 lakh (No tax)
- Rs 2.5 to 5 lakh (5% tax)
- Rs 5 lakh to Rs 7.5 lakh (10% tax)
- Rs 7.5 lakh to Rs 10 lakh (15% tax)
- Rs 10 lakh to Rs 12.5 lakh (20% tax)
- Rs 12.5 lakh to Rs 15 lakh (25% tax)
- Rs 15 lakh and greater (30% tax)
Sitharaman also announced that the government was determined to simplify the tax procedures and a tax charter will be notified soon, which will enable greater transparency. This will also benefit startups and business houses who had complained of harassment by tax officials.
The new tax rates will ensure that you can make use of a simplified tax filing system from April 1, 2020, allowing you to make use of a simplified tax code.
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