5 Major announcements for Personal Income tax in the Finance Budget:
- Rebate under section 87A currently upto 5 lacs now increased to 7 lacs in new tax regime. If your Income is upto 7 lacs no tax has to be paid.
- Middle class individuals:
Earlier there were 6 slabs which now stands changed. Tax slabs reduced to 5 and increasing the exemption limit to Rs. 3 lacs.
Slab rates under new regime now stands at:
> 0-3 Lacs - nil
> 3-6 Lacs - 5%
> 6-9 Lacs -10% Rs 45,000 tax to be paid which was earlier Rs. 60,000.
> 9-12 Lacs - 15%
> 12-15 Lacs - 20%
> 15 Lacs and above - 30% Rs. 1,50,000 only 10% of Rs. 15 Lacs which was earlier Rs 1,87,500.
- Standard deduction for Salaried individuals:
For individuals earning salary above Rs. 15.5 Lacs will benefit by Rs. 52,500.
This point needs to be analysed after release of Annexures!
- Highest Tax rate in India 42.74% is reduced by reducing the surcharge rate from 37% to 25% in new tax regime. Now maximum tax rate comes to 39%.
- Limit of 3 lacs on leave encashment increased to 25 lac rs! This was last revised in 2002. More light on this point is needed. Analysing the annexure would help!
Your favourite part of budget ready for you!
Clearly Finance Minister has stressed on the new tax regime so that maximum individuals convert from old regime to new regime!
Average processing time for ITRs have been reduced from 93 days to 16 days!