FM Nirmala Sithraman has changed income tax slabs and cut income tax rates for earnings up to Rs 15 lakh per year, making it optional for taxpayers who will then have to let go of 70 exemptions. The list of 30 other exemptions that will be allowed are not known yet. As per the new income tax structure, those earning up to Rs 5 lakh will not have to pay any tax.
Revised Income Tax Slabs
- 10% for income between Rs 5 lakh-7.5 lakh against 20%.
- 15% for income between Rs 7.5 lakh-10 lakh against 20%
- 20% for income between Rs 10-12.5 lakh against 30%
- 25% for income between Rs 12.5 -15 lakh against 30%
- 30% for income above Rs 15 lakh
This means lower tax rate for those in the Rs 5 to 15 lakh bracket.
Explaining the new tax relaxations, Finance Minister Nirmala Sitharaman says that a person who earns Rs 15 lakh per anum and is not availing any deductions will now pay Rs 1.95 lakh tax in place of Rs 2.73 lakh now.
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