Finance Minister Nirmala Sitharaman on Saturday proposed new personal income tax slabs in the Union Budget 2020. Under the new tax regime, 7 income slabs have been introduced and tax rates have been slashed on income up to Rs 15 lakh. The new tax regime will, however, be optional. This means taxpayers will be given the choice to either continue with the old tax regime with exemptions or opt the new reduced tax rates without exemptions.
According to the proposal, in the new tax regime, substantial tax benefit will accrue to a taxpayer depending upon exemptions and deductions claimed by him.
Here's a difference in tax under old and new regime on same levels of income for individuals below 60 years of age:
|Income slab||Tax out go in old regime||Tax out go in new regime without exemption|
|Income up to Rs. 7.5 lakhs||No tax liability assuming deductions are being availed|
|If no deductions are availed more tax out go would be there||Rs. 39000 payable in taxes|
|Rs. 10 lakh||Rs. 85800 if deductions are availed|
|Rs. 12.5 lakhs||Rs. 148,200 if deductions are availed||Rs. 130000|
|Rs. 15 lakhs||Rs. 2.73 lakh if not availing deduction|
|Rs. 1.52 lakh in case he is availing deduction||Rs. 1.95 lakh|
|Rs. 20 lakh|
|If deductions are availed Rs. 3.82 lakh||Rs. 3.51 lakhs|