Significant relief for taxpayers with new personal income tax regime

Published By : Admin | February 1, 2020 | 17:24 IST
Share
 
Comments

In order to provide significant relief to the individual taxpayers and to simplify the Income-Tax law, the Union Budget proposes to bring a new and simplified personal income tax regime wherein income tax rates will be significantly reduced for the individual taxpayers who forgo certain deductions and exemptions. While presenting the Union Budget 2020-21 in Parliament today, the Union Minister for Finance & Corporate Affairs, Smt Nirmala Sitharaman said, “The new tax regime shall be optional for the tax payers.” She further said that an individual who is currently availing more deductions and exemptions under the Income Tax Act may choose to avail them and continue to pay tax in the old regime.

 

The New personal Income tax regime proposes the following tax structure:

Taxable Income Slab (Rs.)

Existing tax rates

New tax rates

0-2.5 Lakh

Exempt

Exempt

2.5-5 Lakh

5%

5%

5-7.5 Lakh

20%

10%

7.5-10 Lakh

20%

15%

10-12.5 Lakh

30%

20%

12.5-15 Lakh

30%

25%

Above 15 Lakh

30%

30%

In the new tax regime, substantial tax benefit will accrue to a taxpayer depending upon exemptions and deductions claimed by him.  For example, a person earning Rs 15 lakh in a year and not availing any deductions etc. will pay only Rs, 1,95,000 as compared to Rs, 2,73,000 in the old regime. Thus his tax burden shall be reduced by 78,000 in the new regime. He would still be a gainer in the new regime even if he was taking deduction of Rs 1.5 lakh under various sections of Chapter VI –A of the Income Tax Act under the old regime.

The new tax regime will be optional for the taxpayers. As per the Memorandum explaining the provision in the Finance Bill, the option shall be exercised for every previous year where the individual or the HUF has no business income and in other cases the option once exercised for a previous year shall be valid for that previous year and all subsequent years. The option shall become invalid for a previous year or previous years as the case may be if the individual or HUF fails to satisfy the conditions and other provisions of the Act shall apply.

The new personal income tax rates will entail estimated revenue forgone of Rs 40,000 crore per year.  Smt Sitharaman said, “We have also initiated measures to prefill the income tax return so that an individual who opts for the new regime would need no assistance from an expert to file his return and pay income tax.” The Finance Minister said that in order to simplify the income tax system, she has reviewed all the exemptions and deductions incorporated over the past several decades.”

In the Budget, around 70 of the existing exemptions and deductions of different nature (more than 100) have been proposed to be removed.  Remaining exemptions and deductions will be reviewed and rationalised in the coming years with a view to further simplifying the tax system and lowering the tax rate.

'মন কী বাত'কীদমক্তা হৌজিক অদোমগী ৱাখল্লোন অমদি তান-ৱাশিং শেয়র তৌবীয়ু!
পি.এম.না ‘পরিক্সা পে চর্চা ২০২২’গীদমক্তা শরুক য়ানবগীদমক্তা চেবাউ পীরকখ্রে
Explore More
পি.এম.না উত্তর প্রদেশকী বারানসীদা কাশী বিশ্বনাথ ধাম শঙ্গাবদা থমখিবা ৱারোল

Popular Speeches

পি.এম.না উত্তর প্রদেশকী বারানসীদা কাশী বিশ্বনাথ ধাম শঙ্গাবদা থমখিবা ৱারোল
Indian economy has recovered 'handsomely' from pandemic-induced disruptions: Arvind Panagariya

Media Coverage

Indian economy has recovered 'handsomely' from pandemic-induced disruptions: Arvind Panagariya
...

Nm on the go

Always be the first to hear from the PM. Get the App Now!
...
PM thanks world leaders for their greetings on India’s 73rd Republic Day
January 26, 2022
Share
 
Comments

The Prime Minister, Shri Narendra Modi has thanked world leaders for their greetings on India’s 73rd Republic Day.

In response to a tweet by PM of Nepal, the Prime Minister said;

"Thank You PM @SherBDeuba for your warm felicitations. We will continue to work together to add strength to our resilient and timeless friendship."

In response to a tweet by PM of Bhutan, the Prime Minister said;

"Thank you @PMBhutan for your warm wishes on India’s Republic Day. India deeply values it’s unique and enduring friendship with Bhutan. Tashi Delek to the Government and people of Bhutan. May our ties grow from strength to strength."

 

 

In response to a tweet by PM of Sri Lanka, the Prime Minister said;

"Thank you PM Rajapaksa. This year is special as both our countries celebrate the 75-year milestone of Independence. May the ties between our peoples continue to grow stronger."

 

In response to a tweet by PM of Israel, the Prime Minister said;

"Thank you for your warm greetings for India's Republic Day, PM @naftalibennett. I fondly remember our meeting held last November. I am confident that India-Israel strategic partnership will continue to prosper with your forward-looking approach."