Big Changes In Income Tax Rates Soon| Modi 3.0 First Budget To Bring Cheer To Middle-Class?
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The one question before every
The one question before every Union Budget presentation always is – will the Finance Minister lower income tax rates? And what bothers the middle class soon after the Budget is that there is never enough in the budget speech for them.
Well, that could change this time. And for the better, especially if you are in the sub-5 lakh rupee tax bracket.
I’ll tell you all about it in the next three minutes.
But before that, let’s take a here’s a quick look at the current income tax slabs.
For those opting for the old Tax regime, there’s no income tax for annual income up to Rs 2.5 Lakh. For income of Rs 2.5 Lakh to Rs 5 Lakh, a 5% tax rate, for Rs 5 Lakh to Rs 10 Lakh, a 20% tax rate and for income above Rs 10 Lakh, a 30% tax rate is applicable. The old tax regime still gives you the benefit of tax-saving deductions on investments made under various sections like 80C etc on PPF deposits, provident fund, life insurance, health insurance etc.
In the new tax regime, for annual income up to Rs 3 lakh, there is no tax. For income of more than Rs 3 lakh up to Rs 6 lakh, it is 5%. Over Rs 6 lakh up to Rs 9 lakh, it is 10%. Over Rs 9 lakh to Rs 12 lakh, it is 15% and over Rs.12 lakh to Rs.15 lakh, it is 20%. A 30% tax rate is applicable on income above Rs 15 lakh. (gfx out))
Additionally, rebate under Section 87A for income of Rs 7 lakh means that any individual opting for the new tax regime with a taxable income of up to Rs 7 lakh will not pay any taxes.
Reports now indicate that a revision of tax rates in the New Tax Regime are likely to be announced in the upcoming Budget in July, and that could mean good news for those earning up to 5 lakh rupees and opting for the New Tax Regime.
Why this time?
Well, inflation and unemployment concerns could become Budget priorities and an effort to boost consumption will add to the GDP. But the downside is the government’s fiscal deficit target – so it will need to collect more taxes as revenue, but perhaps not from the lower income group.
So what will the government do?
A key proposal under review is increasing the tax-free income limit in the New Tax Regime from Rs 3 lakh to Rs 5 lakh. This way, more disposable income in the hands of taxpayers will encourage them to switch to the new regime and hence, the tex net will likely widen with more IT returns being filed, even though these would be nil returns.
Some reports also suggest that those earning over Rs 15 lakh annually may see some tax relief in the new tax regime which is presently taxed at 30%. The 15 lakh threshold could be pushed higher, with more taxpayers paying 20% instead of 30% tax.
What eventually comes out of the Finance Minister’s bahikhata could still be a surprise, and we will know the final blueprint only after her speech.
..............................................................................................
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Well, that could change this time. And for the better, especially if you are in the sub-5 lakh rupee tax bracket.
I’ll tell you all about it in the next three minutes.
But before that, let’s take a here’s a quick look at the current income tax slabs.
For those opting for the old Tax regime, there’s no income tax for annual income up to Rs 2.5 Lakh. For income of Rs 2.5 Lakh to Rs 5 Lakh, a 5% tax rate, for Rs 5 Lakh to Rs 10 Lakh, a 20% tax rate and for income above Rs 10 Lakh, a 30% tax rate is applicable. The old tax regime still gives you the benefit of tax-saving deductions on investments made under various sections like 80C etc on PPF deposits, provident fund, life insurance, health insurance etc.
In the new tax regime, for annual income up to Rs 3 lakh, there is no tax. For income of more than Rs 3 lakh up to Rs 6 lakh, it is 5%. Over Rs 6 lakh up to Rs 9 lakh, it is 10%. Over Rs 9 lakh to Rs 12 lakh, it is 15% and over Rs.12 lakh to Rs.15 lakh, it is 20%. A 30% tax rate is applicable on income above Rs 15 lakh. (gfx out))
Additionally, rebate under Section 87A for income of Rs 7 lakh means that any individual opting for the new tax regime with a taxable income of up to Rs 7 lakh will not pay any taxes.
Reports now indicate that a revision of tax rates in the New Tax Regime are likely to be announced in the upcoming Budget in July, and that could mean good news for those earning up to 5 lakh rupees and opting for the New Tax Regime.
Why this time?
Well, inflation and unemployment concerns could become Budget priorities and an effort to boost consumption will add to the GDP. But the downside is the government’s fiscal deficit target – so it will need to collect more taxes as revenue, but perhaps not from the lower income group.
So what will the government do?
A key proposal under review is increasing the tax-free income limit in the New Tax Regime from Rs 3 lakh to Rs 5 lakh. This way, more disposable income in the hands of taxpayers will encourage them to switch to the new regime and hence, the tex net will likely widen with more IT returns being filed, even though these would be nil returns.
Some reports also suggest that those earning over Rs 15 lakh annually may see some tax relief in the new tax regime which is presently taxed at 30%. The 15 lakh threshold could be pushed higher, with more taxpayers paying 20% instead of 30% tax.
What eventually comes out of the Finance Minister’s bahikhata could still be a surprise, and we will know the final blueprint only after her speech.
..............................................................................................
News9 is India's first fully integrated English news brand across all digital platforms. It includes a publishing platform, viz. www.news9live.com, a future-ready OTT platform, News9 Plus, and a 24-Hour video streaming service on connected TVs and all social platforms.
It's the English news brand that understands and fits perfectly into the digital-first lifestyles of our English news audiences.
► News9 Plus App : https://onelink.to/8pwfkc
► News9 OTT Coupons : https://bit.ly/4dwLDx4
► Watch us on YouTube : news9live
► Like us on Facebook : Facebook: news9live
► Follow us on Instagram : Instagram: news9live
► Follow us on Twitter : Twitter: NEWS9TWEETS
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در تاریخ 1403/03/30 منتشر شده
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