Finance Minister Nirmala Sitharaman on Saturday proposed a personal income tax regime with reduced rates for those earning up to Rs. 15 lakh.
The tax rate for those earning between ₹5 lakh and ₹7.5 lakh has been lowered from 20% to 10%, and for incomes between ₹7.5 lakh and ₹10 lakh to 15% from 20%. Similarly, tax rates have been lowered from 30% to 20% for those earning between ₹10 lakh and ₹12.5 lakh, and to 25% for those with incomes from ₹12.5 lakh to ₹15 lakh.
However, tax payers can opt for new rates only if they give up almost all tax exemptions and deductions they enjoy under the current regime.
The graphic looks at various scenarios of taxable income for salaried individuals and calculates the total tax payable before the proposals in Budget 2020-21 and after applying them. This is based on Ernst and Young calculations.
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