New optional tax regime of India reduces income tax rates: Nirmala Sitharaman
New Delhi/IBNS: Union Finance Minister Nirmala Sitharaman announced a new tax regime for Indians where a person earning upto Rs 5 lakh will not pay any tax while the rates were slashed between five to ten percent for other income categories from above INR 5 lakh to INR 15 lakh. Those opting for this scheme will however, not enjoy the previous exemptions.
Presenting the Budget 2020, she said the following about the new tax regime:
Those earning upto 5 lakh will not pay any tax
Those earning from INR 5 lakh INR 7.5 lakh will pay a tax of 10 percent, which is ten percent less than the existing rate is 20 percent.
Those earning from INR 7.5 to INR10 lakh will pay at the rate of 15 percent now against the prevailing 20 percent.
Those earning from INR 10 lakh to INR 12.5 lakh will pay 20 percent tax, which is a reduction from the prevailing 30 percent.
Those earning INR 12.5 to INR 15 lakh will be taxed at 25 percent from existing 30 percent.
Income above INR 15 lakh will pay at same rate of 30 percent.
Under the new regime, which is optional, a tax payer not be able to avail of any deductions or exemptions that were in the old regime.
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