Finance Minister Nirmala Sitharaman on Wednesday announced major changes to the personal income tax structure in the country.
The major announcements are as follows:
1. Tax rebate limit increased to Rs 7 lakh from Rs 5 lakh in new tax regime.
2. Tax slabs have been reduced to five. Revised Tax slabs: Rs 0-3 lakh: 0 per cent; Rs 3-6 lakh: 5 per cent; Rs 6-9 lakh: 10 per cent; Rs 9-12 lakh: 15 per cent; Rs 12-15 lakh: 20 per cent; Rs 15+ lakh: 30 per ce
3. Extensionof the benefit of standard deduction under the new tax regime to the salaried class. Each salaried person with an income of Rs 15.5 lakh or more will thus stand to benefit by Rs 52,500.
4. Highest surcharge rate reduced from 37 per cent to 25 per cent in new tax regime. This would result in reduction of the maximum tax rate to 39 per cent, from 42.74 per cent earlier.
5. The Rs 3 lakh limit for tax exemption on leave encashment on retirement of non-government salaried employees was increased to Rs 25 lakh.
Sitharaman further announced that the new Income Tax regime would become the default tax regime in India.
She also announced the streamlining of the filing process for I-T returns, tax relief for cooperative societies, benefits for startups, among others.
More to follow...
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