From Our Bureau
NEW DELHI: Meeting expectations of the income-tax payees, particularly the middle class, Finance Minister Nirmala Sitharaman on Wednesday increased the income rebate limit from Rs 5 lakh to Rs 7 lakh and brought in five new income tax slabs in the Union Budget she tabled in Parliament.
The new income tax rates are reduced from six slabs to five:
Rs 0-3 lakh — Nil (instead of Rs 2.5 lakh)
Rs 3-6 lakh — 5%
Rs 6-9 lakh — 10%
Rs 9-12 lakh – 15%
Rs 12-15 lakh – 20% and
Above Rs 15 lakh — 30%.
The personal tax exemption limit was last revised by the Modi regime in 2014. The income tax slabs have also not been changed since 2014. The new tax regime remains optional for the taxpayers.
The new tax regime announced by the finance minister has helped the taxpayers at both ends of the spectrum as there will be no liability of tax up to the annual income of Rs 7 lakh on one hand and the surcharge on annual income above Rs 5 crore has been reduced from 37 to 25% at the high income end.
The refund has been raised to Rs 7 lakh under the new tax regime. The taxpayers will still be able to choose from the previous regime.
In case of the salaried and pensioners, the standard deduction under the new system for taxable income exceeding Rs 15.5 lakh is Rs 52,500.
The FM promoted the new tax regime as the default tax regime, but allowed the taxpayers to opt for the old regime as well.
An individual with an annual income of Rs 9 lakh will have to pay only Rs 45,000.
The finance minister also announced that the average processing time for the income tax returns reduced from 93 days to 16 days.
