The new tax changed has reduced the income tax rate for new slabs and individual slabs from separate income to Rs 2,000. If any taxpayer chooses the aforesaid exemption and deductions option, then Rs. 15 lakhs per annum.
Finance Minister Nirmala on February 1 with the aim of reducing rates and simplifying the structure Sitharaman announced the new government with personal income tax. The new tax changed has reduced the income tax rate for new slabs and individual slabs from separate income to Rs 2,000. If a taxpayer chooses the aforesaid exemption and deduction option, then Rs. 15 lakh per annum. The new tax tariff provides a lower tax rate and a new tax slab and at the same time removes the tax exemption and will result in a lower amount of tax for taxpayers, according to the finance minister. Under the new proposal, the tax structure will be detailed in the table below:
However, the new tax system will be optional and taxpayers will have the option of either giving concessions or staying in the old system with the concessions or new reduced tax rates without those concessions. As proposed in the new tariff system, the new system will remove tax exemptions, but the tax benefits of retirement money, VRS, NPS and a few other categories will continue in the case of the new scheme.
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The proposal will result in a loss of Rs 5,000 crore in revenue. 40,000 cores a year. Which tax systems or new ones will be beneficial, i.e. a small amount of tax for each person depends on his income organization and the investments are completed. Each person has to calculate their income to determine which tax system is best for them.
For example, a person earning between Rs 3.5 lakh to Rs 5 lakh will not see any change in the income tax slab as there is no change in it. However, if a person earns Rs. 10,000 /- to . 5.5 lakh in a year and Rs. 18,200 as per the new tax discipline as compared to almost Zero due to tax exemption as per policy and insurance as per old tax rate.
So, in this case, the old tax is beneficial. Meanwhile, if a person earns Rs. 10,000 / -. 15 lakes in a year and not availing any discount etc. only Rs. 1,99,000 as against the new tax rate of Rs. 73 273,000 in the old tax system.
The finance minister further said that the corporate tax was reduced last September, the government has followed the same pattern and there was a plan for those who were looking for a simpler structure and others could go with the rebate. In addition, the Center has proposed a solution to the problem in the Union Budget 2020 to protect taxpayers from harassment. In the budget, speech FM introduced a taxpayer charter that will be established.
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