FM Nirmala Sitharaman has changed income tax slabs and cut income tax rates for earnings up to Rs 15 lakh per year, making it optional for taxpayers who will then have to let go of 70 exemptions. The list of 30 other exemptions that will be allowed are not known yet. As per the new income tax structure, those earning up to Rs 5 lakh will not have to pay any tax.
Here’s a look at the new tax slabs and rates:
10% for income between Rs 5 lakh-7.5 lakh.
15% for income between Rs 7.5 lakh-10 lakh.
20% for income between Rs 10-12.5 lakh.
25% for income between Rs 12.5 -15 lakh.
30% for income above Rs 15 lakh.
FM Nirmala Sitharaman says for affordable housing, the deduction of Rs 1,50,000 will be extended to loan sanction by one year. Tax holiday on profits of developers involved in affordable housing projects will be extended by one year to March 2021.
FM Nirmala Sitharaman says the concessional 5% withholding tax has been extended to municipal bonds. Cooperatives are taxed at 30 percent now. FM says cooperatives can choose a 22 percent tax with 10 percent surcharge and 4 percent cess with no exemptions.
New income tax slabs with reduced rates were introduced by finance minister Nirmala Sitharaman in her Union Budget 2020 speech on Saturday, providing big relief to the middle class as was expected.
Senior Congress leader Shashi Tharoor too took a veiled dig at the government over the union budget 2020 saying that there was a “re-packaging of old slogans”. “We have gone from Stand Up India to Sit Down India,” he said. However, he said that there is some relief for the middle class in the form of tax reductio