TLI Staff
New Delhi: Aiming to boost purchasing power of people, FM Nirmala Sitharaman has on Saturday announced a new simplified tax regime in the Union Budget 2020-21.
Under the revised regime, individual earning up to Rs 5 lakh will not be required to pay any tax. Those earning from Rs 5 lakh to Rs 7.5 lakh will pay 10 % tax.
Individuals with income of Rs 7.5 lakh to Rs 10 lakh will be required to shell 15% of their income as tax against 20% before.
Rs 10 lakh to Rs 12.5 lakh income will attract the tax rate of 20%, while those who pocket Rs 12.5 lakh to Rs 15 lakh will now get relief and pay 25% in taxes instead of the earlier 30%.
For those earning more than Rs 15 lakh, there is no relief and they will continue to pay taxes @ 30%.
These new income tax rates will be optional and will be applicable for those who forego reliefs and exemptions.
70 of more than 100 income tax deductions and exemptions have been removed to simplify the tax regime.
Also, DDT (dividend distribution tax) has been removed which means dividend shall be taxed at the hands of the recipients.