Income Tax Rates and Slabs: The maximum tax rate, 30%, would be applied to income beyond Rs 15 lakh under the new tax system.
The new income tax slabs under the new income tax system were disclosed by Finance Minister Nirmala Sitharaman in her Budget statement on Wednesday. The tax credit has increased under the new system from Rs. 5 to Rs. 7 lahks. In addition, unless the taxpayer elects to use the previous system, it will remain the default.
For income up to Rs. 3 lahks, there is no tax due. A 5% tax will be applied to income between Rs. 3 and Rs. 6 lahks. According to the new income tax system, the maximum tax rate of 30% would be applied to earnings beyond Rs 15 lakh.
The biggest reduction in surcharge rate has been reduced from 37% to 25%.
A limit of Rs. 10 crores was also recommended by the Centre for capital gains tax deductions on investments in residential properties.
According to Sitharaman, “I recommend that in the new tax regime, the maximum surcharge rate be reduced from 37% to 25%.”
Sitharaman claims that just Rs. 45,000 will be required as tax from an individual making Rs. 9 lahks per year. As a result of the new tax system, a person earning Rs 15 lakh would now only be required to pay Rs 1.5 lakh in taxes instead of Rs 1.87 lakh.
Changing direct and indirect taxes resulted in a loss of net tax collection of 35,000 crore rupees, according to FM Sitharaman.
Additionally, the maximum investment amount under the senior citizen savings plan has been raised from Rs. 15 lahks to Rs. 30 lahks.
For retired salaried non-government workers, the tax exemption threshold for leave redemption has been set at Rs 25 lakh.