Budget cuts IT rates - Tax exemption for less than 5L
The union budget has reduced the income tax rate , which would impress the employees and middle income group all over the nation. Even the slabs in various income groups also revised. The finance minister has presented the budget for 2020-21 in Lok Sabha today and modified the IT slabs.
As per the new regime, 70 tax exemptions will be removed but the income between Rs 5 lakh and Rs 7.5 lakh will be taxed at 10% down from current 20%, income between Rs 7.5 lakh and Rs 10 lakh will be taxed at 15% down from current 20%, and income between Rs 10 lakh and Rs 12.5 lakh will be taxed at 20% down from current 30%. Income between Rs 12.5 lakh and Rs 15 lakh will be taxed at 25% down from current 30%. Incomes above Rs 15 lakh will continue to be taxed at 30%.
Budget 2020 has offered tax payers the option to choose between the existing income tax regime and a new regime with slashed income tax rates and new income tax slabs but no tax exemptions. The new tax regime offers lower tax rates and new tax slabs and simultaneously removes tax exemptions and will result in lower tax outgo for the tax payer, according to the finance minister.