Budget 2020: New income tax slabs, but lower rates are optional

A Mumbaikar listens as Union Finance Minister Nirmala Sitharaman reads out Budget 2020 on Saturday. Pic/Ashish Raje

There is some relief for taxpayers in the Union Budget 2020, with a reduction in tax percentage and the introduction of an option. One can choose to pay according to the new tax regime or by the old one depending on which benefits you more. While Union Finance Minister Nirmala Sitharaman insisted that professional involvement during filing taxes will be reduced, citizens say they might still have to rely on their CAs while calculating returns as both methods might have to be considered."

Currently, the Income Tax Act is riddled with exemptions and deductions, which make it almost impossible for taxpayers to comply with the law without the help of professionals. The new, simplified personal income tax regime, where tax rates will be significantly reduced for those who forgo certain deductions and exemptions, is an attempt to make things easier for taxpayers.

Under the new regime, tax has been reduced to 10 per cent for income between R5 to R7. 5 lakh against the current 20 per cent; between R7.6 lakh and R10 lakh, tax is 15 per cent tax against the current 20 per cent; between R10.1 lakh and R12.5 lakh, the tax is 20 per cent against the current 30 per cent. Those earning between R12.5 lakh and R15 lakh will be taxed at 25 per cent against 30 per cent. Incomes above R15 lakh will continue to be taxed at 30 per cent. Those earning up to R5 lakh will have no tax burden.

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