Optional New Tax Regime
While there is no change in the existing Income-tax slab rates for
individuals, a new tax regime has been proposed under which individuals
foregoing exemptions and deductions would be taxed at reduced tax rates.
The exemptions and deductions that would need to be foregone include inter alia
exemptions and deductions claimed widely by individuals are as under:
- Section 80C Investments
- House Rent allowance
- Housing Loan Interest
- Leave Travel Allowance
- Medical Insurance Premium (80D)
- Standard Deduction
- Saving Bank interest
The
Income-tax slab rates applicable under the new tax regime would be:
Slab Rates |
Old Rate of Tax |
New Rate of tax |
Up to INR
2,50,000 |
Nil |
Nil |
INR 2,50,001 to INR 5,00,000 |
5% |
5% |
INR 5,00,001 to INR 7,50,000 |
20% |
10% |
INR 7,50,001
to INR 10,00,000 |
20% |
15% |
INR 10,00,001
to INR 12,50,000 |
30% |
20% |
INR 12,50,001
to INR 15,00,000 |
30% |
25% |
Above
15,00,000 |
30% |
30% |
- Ø The budget has made the tax structure a little more complicated by adding three more slabs. This will make compliance easy but tax planners who maximized their tax deductions will probably pay more tax under new regime.
- Ø The budget has tried to put more money in the hands of tax payers by reducing the benefits to save.
- Ø Taxpayers will have the option to switch to the new tax regime. Taxpayers will be able to make the choice depending on their financial situations.
- Ø To know which regime is better please refer
o Individual earning Income between Rs. 5 Lakhs to 7.5
Lakhs
o Individual earning Income between Rs. 7.5 Lakhs to 10
Lakhs
o Individual earning Income between Rs. 10 Lakhs to 12.5
Lakhs
o Individual earning Income between Rs. 12.5 Lakhs to 15
Lakhs
No comments:
Post a Comment